Faulty machinery: IESCO orders 700 transformers from defaulters

Inquiry committee seeks complete data on materials used to manufacture them.

LAHORE:

The Islamabad Electric Supply Company (IESCO) has issued purchase orders to two defaulter firms to obtain a supply of 700 transformers, according to official documents made available to The Express Tribune.

IESCO issued purchase orders to M/s AB Ampere Pvt Ltd for the supply of 400 transformers of 25 KVA worth Rs57.41 million, and to Hammad Engineering Pvt Ltd for the supply of 300 transformers worth Rs151.728 million, official documents revealed.

The move comes despite the prevalence of fraud involving billions of rupees every year on account of transformers manufactured from scrap materials and the issuance of bogus prequalification to manufacturers who are already under investigation for supplying substandard materials. Pakistan Electric Power Company (PEPCO) has been hit particularly hard by the move.

Due to the evident corruption, an inquiry committee formed by the National Transmission and Dispatch Company (NTDC) has sought complete data on the materials which are being used in the manufacturing of these transformers.

The inquiry committee also sought the documents relating to the transformer core and oil material purchased and consumed from manufacturers involved in the scandal, official documents stated.

During the course of inquiry, it was found that manufacturers involved in the multi-billion rupee scandal had obtained only a small quantity of the purchased material compared to the actual quantity used in manufacturing the transformers.

This information could prove that the material used in the transformers was purchased from an unauthorised source and made of scrap materials.

The manufacturers in question were asked to justify the shortfall in purchases, but could not come up with an explanation during the course of the inquiry conducted by the NTDC as well as the Federal Investigation Agency (FIA), sources familiar with the matter told The Express Tribune.

The inquiry committee of the NTDC, in a letter addressed to Hammad Engineering Pvt Ltd, wrote that it had obtained the core import record of the company from the Pakistan Customs Department and local suppliers, NAZMAFK Pvt Ltd, Impex International and Faisal Impex.

The letter further states that the committee has also collected the record of transformers supplied by the firm for the same period. It adds that the complete summary of the record shows a shortage of 353,780 kg in the core material.

The departmental inquiry committee has established a shortfall of silicon electric steel sheet. The material inspection design and services department are still involved in prototype tests of the transformers.

Contrary to the observations of the inquiry committee as well as the probe launched by the Anti Corruption Circle (ACC) of the FIA into the matter, IESCO issued these purchase orders.

Even Lahore Electric Supply Company’s (LESCO) pre-qualification authority seems to have approved these manufacturers. Sources have said that it seems LESCO officials are trying to derail the proceedings and deliberately mislead the FIA. The FIA has already launched a probe against LESCO officials in this regard, sources familiar with the development said.

Published in The Express Tribune, August 15^th, 2012.