Railways scrap scandal: NAB gives railways minister a clean slate

Move comes despite allegations that the minister, Railways officials received Rs150m.

Asad Kharal July 31, 2012


The National Accountability Bureau (NAB) has given a clean slate to Federal Railways Minister Haji Ghulam Ahmad Bilour and former chairman of Pakistan Railways (PR) Kashif Murtaza in the multi-million-rupee railways’ bulk scrap tenders scandal.

The move comes despite NAB’s investigations lending credence to charges against Bilour and Murtaza, besides other influential officials of the PR and its contractors, sources familiar with the matter said. NAB’s investigation report said that the accused misused their authority in connivance with private contractors, by illegally awarding the sale of tender Numbers 588-B and 607-B in bulk in violation of the Pakistan Railways Code for the Stores Department and the Public Procurement Regulatory Authority rules.

The report added that the accused PR officers provided pecuniary benefits to the contractors and gained the same for themselves. The tenders had been awarded to those contractors who are said to have close contacts to Bilour and top-ranking officials of the PR for lower rates, compared to the open market rates. As a result the national exchequer incurred a loss of Rs80.1 million, whereas the sale of the scrap material led to a loss of Rs268.9 million for the railways.

The investigation revealed that the scrap tenders were auctioned by the PR at Rs28,700 per metric tonne, against the market price of around Rs37,000 per metric tonne. Thus, NAB investigators stopped the contractors from acquiring the remaining 34,000 metric tonnes of scrap material from the PR’s storage facilities for sale.

The bureau’s investigation further alleged that Murtaza illegally assumed the jurisdiction for selling the railways scrap in bulk, therefore every subsequent action in the tender becomes ‘void ab initio’, by the very assumption of the illegal jurisdiction of power for selling the scrap in bulk. Ex-chairman of the PR, Samiul Haq Khilji and General Manager Operations Saeed Akhtar admitted that the practice of bulk tendering was never disputed by any office or officer of the railways, though the provision of bulk tendering was not allowed under any law, code or railways’ manual.

Despite the fact that the former chief controller of the Pakistan Railways Code for the Stores Department alleged that Bilour, Khilji and Akhtar received Rs150 million from the contractors for granting permission of the sale of the scrap contrary to the rules of the PR as illegal gratification, NAB has yet to summon Bilour even once to clarify his position, while Murtaza has also not been interrogated.

The scandal is a first in the history of the railways body, as it allowed the sale to restrict competition and keep other prospective bidders away from participating in the bidding. NAB has not only cleared the accused of all wrongdoing, it has also not filed a reference before the accountability court and has closed down the investigation, sources claimed.

Published in The Express Tribune, July 31st, 2012.

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