Railways corruption: ‘Purchased at inflated prices, 80% of spare parts unused’

Under a pricey deal, PR bought parts from a Chinese company even though their track record was poor.

Asad Kharal April 22, 2012


Pakistan Railways almost blew its entire maintenance budget on the purchase of spare parts for Chinese locomotives used by the institution, according to a National Accountability Bureau (NAB) inquiry report, which added that 80% of these parts remain unused.

The spare parts were purchased as a result of a dubious contract with a Chinese company, Dalian, worth a whopping $15.2 million. The reason for this exorbitant price was that the spare parts were purchased at a rate that was around two to five times higher than market prices.

NAB conducted the inquiry on the orders of the Supreme Court, and the subsequent report has been finalised, a member of the inquiry team told The Express Tribune.

Sources said that arrests of the concerned PR officials are expected soon, and the process will be started after NAB’s executive board converts the inquiry into an investigation.

Extracts of the inquiry report said that the Railway board’s executive committee had approved the deal for the purchase of spare parts with Dalian, even though the trains purchased from the same company had almost completely fallen apart within a short time of their purchase. Also, as a result of exhausting their maintenance budget, several other locomotives also fell apart due to negligence.

PR’s former general manager (operations) has admitted that the maintenance contract worth $15.2 million had failed to produce any results.

NAB’s report emphasised that the deal was unnecessary and unjustified because the spare parts which had been purchased in bulk were obviously not needed – most were still lying in the warehouses of Pakistan Railways.

The report elaborated that, from 2003 to 2007, PR purchased a fleet of 69 locomotives manufactured by Dalian. By 2009, most of these developed major faults, which could not be fixed through spare parts alone. Yet, in 2009, the PR board’s executive committee considered a maintenance contract with the locomotives manufacturer.

Moreover, the price of 276 of the items purchased was five times higher than the market price while the price of 340 items was almost double, a member of the probe team said.

After finalising the inquiry report, NAB has started the process of placing certain names on the Exit Control List. NAB has also sought details of their assets and bank accounts. On the other hand, the bureau has shown reluctance in taking legal action against Dalian itself, because it’s a Chinese company, according to sources.

Published in The Express Tribune, April 22nd, 2012.


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