Selling cars at throw-away prices: OGDCL caused Rs405 million loss to exchequer

Violates its car policy and offers 43 new vehicles to different employees at Rs1,000 each

ISLAMABAD:

The Oil and Gas Development Company Limited (OGDCL) has caused a loss of more than Rs405 million to the national exchequer as it sold hundreds of vehicles to it officers at a throwaway price, reveal official figures presented in parliament last month.

The document, a copy of which is available with The Express Tribune, shows that some 43 of these OGDCL vehicles (Toyota Corolla & Suzuki Cultus) were given away to some officers for Rs1,000  each and a total of 152 vehicles were sold at a cumulative price of Rs40 million during the last five years.



The actual price of these vehicles was more than Rs445 million in the open market. These vehicles – including some cars of 2013, 2012 and 2011 models – were sold out to both in-service/retired officers.

Officials at the Ministry of Water and Power claimed that the OGDCL followed the policy while disposing of these vehicles. However, a big chunk of these transactions has been made in violation of the policy which states that a car be sold to an employee after five years of use according to its book value.

The estimated book value of a Toyota 1300cc is from Rs0.9 million to Rs1.1 million while the estimated book value of Suzuki Cultus 1000cc is Rs0.7 million but 43 of such cars were sold at Rs1,000 to managers and chiefs of various projects.

Official document also presents examples of a manager, who bought Toyota 1300cc, 2009 model, for only Rs1,000. The actual price of this vehicle was Rs1,384,000.  Another manager also paid Rs1,000 for Toyota 1300cc against its actual price of Rs1,389,200.

Some OGDCL officials, talking to The Express Tribune on condition of anonymity, confirmed that the policy was blatantly violated in some cases. They said that the company instead of treating all employees – working on various projects – equally, misclassified record of some employees, who got favours from their high-ups.

The violation appears all the more obvious when we take into account the fact that of all 300-plus vehicles the company has sold to its employees over the last five years, 162 were actually sold at the book price.



“It is a theft in broad daylight and a callous loss to the national exchequer. It is an outcome of the company’s flopped policy,” said Muttahida Qaumi Movement Senator Col (retd) Tahir Mashhadi.

Senator Mashhadi is now making his mind to move an adjournment motion against the policy at all government entities of doling out precious vehicles at a throwaway price.

Riaz Khan, who recently left the charge of the OGDCL managing director, said the company was following the policy—a set formula for selling vehicles to its officers with 10% depreciation cut on book value of the vehicle.

While admitting that the OGDCL car policy is vague, Riaz Khan claimed that such a policy was also being followed by other companies.  He said this in front of a subcommittee of public accounts committee, headed by MNA Naveed Qamar.

Another former OGDCL MD Najam Kamal also seconded Riaz and said various oil exploring companies operating under the ministry of petroleum and natural resources were following an identical policy.  “However, this policy should be linked to officers’ performance,” he added.

Published in The Express Tribune, November 17^th, 2014.