Millions embezzled from registration plates fund

Supply of plates was suspended after officials pocketed the money.

LAHORE:

The Excise and Taxation Department has ordered a third-party audit of a revolving fund for its computerised number plates (CNP) project to find out which corrupt officials emptied it out.

The department established the fund in 2006 as part of a new project to provide standardised registration plates for cars, motorbikes and rickshaws. Money was withdrawn from the fund to pay the manufacturer of the plates, while fees paid by citizens for registration plates were deposited in the fund.

The fee paid by customers for a plate was set at about twice the cost of manufacture. Five years into the project, the fund should be in a healthy state.

But at a meeting reviewing the contractual arrangements for the procurement of plates in October, it emerged that there was not enough money in the fund to pay off outstanding liabilities to the contractor who manufactured the plates. That was why the department had stopped issuing registration plates in mid-July. Officials had then cited a shortage of material.

Officials at the meeting observed that the revolving fund’s accounts had not been properly maintained or audited since it was set up. They also noted that no record was being kept of unused and undelivered number plates.

“Millions of rupees has been misappropriated,” a senior official told The Express Tribune. He said there was a group of officials in the director general’s office lobbying against a third-party audit, implying that they were the ones responsible for the misappropriation. “Only a third-party audit can uncover the extent of the scam and the delinquent officials, so that the money can be recovered,” he added.

Following the October meeting, Excise and Taxation Secretary Fawad Hassan Fawad wrote to Director General Anwar Rasheed instructing him to select a reputable firm to conduct a third-party audit of the revolving fund. The letter was written in the third week of November.

“We have invited expressions of interest,” said Rasheed, who started his second tenure as DG in February 2011, having already occupied the post from April 2008 to April 2009. “If there are any discrepancies in the account they will come to light in the third-party audit.”

The Excise and Taxation Department started issuing standardised plates as part of the Motor Transport Management Information System project, introduced at a cost of Rs565.69 million. Under the new system, the department would register all vehicles, print registration books and issue number plates. Citizens were charged Rs300 for a motorcycle number plate, Rs400 for a rickshaw plate, and Rs1,000 for a car plate. The system was installed at the DG’s office and a contractor was hired to operate the machinery. The system has the capacity to manufacture up to 7,000 plates per day. The DG’s office was issuing around a 100,000 number plates each month.

Published in The Express Tribune, December 4^th, 2011.