Bogus insurance guarantee: Alternative energy board to be probed
Internal audit places blame on board’s ex-management.
ISLAMABAD:
The government has moved the Federal Investigation Agency (FIA) to probe millions of rupees worth of embezzlement in the Alternative Energy Development Board (AEDB) during the previous regime and asked the agency to initially probe a bogus insurance guarantees scam worth Rs14 million.
If the investigation is carried out without succumbing to pressure, it could lead to key influential personalities that are still at large despite the findings of a special audit report covering the period of 2003-08. During this period, Air Marshal (retd) Shahid Hamid was the chairman and Brigadier (retd) Nasim A Khan, the secretary of AEDB.
“The Auditor General of Pakistan (AGP) has highlighted 14 audit paragraphs and asked us to carry forward the internal investigation to expose the responsible individuals,” said Arif Alauddin, chief executive officer of the AEDB, referring to the special audit report. The AEDB has completed its internal inquiry and referred it to the Water and Power Ministry for further action, he added.
“The FIA was moved to probe against Credit Insurance Company that submitted bogus guarantees of Rs14.1 million on behalf of M/s Pakistan Engineering Company (PERC),” said Alauddin. PERC is allegedly owned by a relative of Brig. Khan who, according to the investigation, played a key role in this scam.
The former AEDB management awarded a contract to PERC on June 14, 2006 for constructing a solar thermal power plant. The main objectives of the project were to provide electricity to remote villages of Sindh and Balochistan. The company never installed the plant but managed to receive Rs14.1 million in advance on bogus guarantees in connivance with the AEDB management, revealed the internal investigation.
According to official documents available with The Express Tribune, a PC-1 of the project was approved at a cost of Rs24.2 million in 2005. In 2007 the cost was revised upwards to Rs39.1 million. Brigadier Khan, the-then secretary/member technical acted as project director, while Dr Irshad Ahmed was the senior project developer. “The project was never completed, became a victim of indifference, callousness and disregard for the rule,” say the official documents.
The project was approved by Brigadier Khan and signed by the supplier Naeem Mukadam, director technical. According to the inquiry, the contract could not have been approved by Brigadier Khan because he was not authorised to sign it. “This type of document was only supposed to be signed and approved by the-then chairman Shahid Hamid.”
The AEDB made the initial payment as mobilisation advance amounting to Rs11.2 million on June 15, 2006 on bogus insurance guarantees. The second payment of Rs333,865 was made on May 2, 2007. While this amount was supposed to be paid after the installation and commissioning of the plants, it was paid before this.
The AEDB made a third payment of approximately Rs2 million on May 14, 2007 which, the documents state, “is not only a violation of the contract, but comes under misuse of public money.”
“The subject payment was sent for approval by Dr Irshad Ahmed and the responsibility lies on him for initiating such kind of document. Brig. Khan is also responsible for recommending it for approval of the-then Chairman Air Marshal (retd) Shahid Hamid,” the inquiry report concludes.
The project has not been completed and the contractor has conveyed his inability to do so.
“The AEDB has sent its findings to the water and power ministry but former AEDB Secretary Shahid Rafi never looked into it and restrained himself from calling a meeting of the departmental accounts committee which delayed the action on the special audit report,” said Alauddin.
Published in The Express Tribune, January 1st, 2011.
The government has moved the Federal Investigation Agency (FIA) to probe millions of rupees worth of embezzlement in the Alternative Energy Development Board (AEDB) during the previous regime and asked the agency to initially probe a bogus insurance guarantees scam worth Rs14 million.
If the investigation is carried out without succumbing to pressure, it could lead to key influential personalities that are still at large despite the findings of a special audit report covering the period of 2003-08. During this period, Air Marshal (retd) Shahid Hamid was the chairman and Brigadier (retd) Nasim A Khan, the secretary of AEDB.
“The Auditor General of Pakistan (AGP) has highlighted 14 audit paragraphs and asked us to carry forward the internal investigation to expose the responsible individuals,” said Arif Alauddin, chief executive officer of the AEDB, referring to the special audit report. The AEDB has completed its internal inquiry and referred it to the Water and Power Ministry for further action, he added.
“The FIA was moved to probe against Credit Insurance Company that submitted bogus guarantees of Rs14.1 million on behalf of M/s Pakistan Engineering Company (PERC),” said Alauddin. PERC is allegedly owned by a relative of Brig. Khan who, according to the investigation, played a key role in this scam.
The former AEDB management awarded a contract to PERC on June 14, 2006 for constructing a solar thermal power plant. The main objectives of the project were to provide electricity to remote villages of Sindh and Balochistan. The company never installed the plant but managed to receive Rs14.1 million in advance on bogus guarantees in connivance with the AEDB management, revealed the internal investigation.
According to official documents available with The Express Tribune, a PC-1 of the project was approved at a cost of Rs24.2 million in 2005. In 2007 the cost was revised upwards to Rs39.1 million. Brigadier Khan, the-then secretary/member technical acted as project director, while Dr Irshad Ahmed was the senior project developer. “The project was never completed, became a victim of indifference, callousness and disregard for the rule,” say the official documents.
The project was approved by Brigadier Khan and signed by the supplier Naeem Mukadam, director technical. According to the inquiry, the contract could not have been approved by Brigadier Khan because he was not authorised to sign it. “This type of document was only supposed to be signed and approved by the-then chairman Shahid Hamid.”
The AEDB made the initial payment as mobilisation advance amounting to Rs11.2 million on June 15, 2006 on bogus insurance guarantees. The second payment of Rs333,865 was made on May 2, 2007. While this amount was supposed to be paid after the installation and commissioning of the plants, it was paid before this.
The AEDB made a third payment of approximately Rs2 million on May 14, 2007 which, the documents state, “is not only a violation of the contract, but comes under misuse of public money.”
“The subject payment was sent for approval by Dr Irshad Ahmed and the responsibility lies on him for initiating such kind of document. Brig. Khan is also responsible for recommending it for approval of the-then Chairman Air Marshal (retd) Shahid Hamid,” the inquiry report concludes.
The project has not been completed and the contractor has conveyed his inability to do so.
“The AEDB has sent its findings to the water and power ministry but former AEDB Secretary Shahid Rafi never looked into it and restrained himself from calling a meeting of the departmental accounts committee which delayed the action on the special audit report,” said Alauddin.
Published in The Express Tribune, January 1st, 2011.