Performance of railways ministry in FY23, FY24 reviewed

ISLAMABAD: The Ministry of Railways told the Public Accounts Committee (PAC) on Tuesday that Railways’ pension budget is still not enough and people have not received pension benefits for two years. 

An allocation of Rs64 billion has been received so far, a liability of Rs13.14 billion has been incurred while the Pakistan Railways’ operating profit is close to Rs1 billion.

The meeting of the PAC was held under Chairman Junaid Akbar in which the audit objections related to the Ministry of Railways for the financial years 2022-23 and 2023-24 were reviewed.

Briefing the PAC, the Railways secretary said ML-1 is a strategic project. Under ML-4, Gwadar is to be connected to the main line. Thar is being connected to the railway system. Phase-1 of ML-1 has been kept from Karachi to Multan, Phase-2 of ML-1 from Multan to Peshawar.

While examining the audit para, the audit officials of Department of Auditor General of Pakistan told the committee about the mis-procurement in violation of PPRA Rules that caused a loss of Rs3.39 billion.

During audit of the project “Special Repair of 100 DE Locomotives (New)” in March 2023, it was observed that five tender bulletins were issued from June 2020 to June 2022 for procurement of material on FOB and FOR basis. These tenders were advertised on single stage two envelop method basis. The audit official was of the view that it was mentioned in the eligibility criteria that only LP approved local firms and regular approved firms for FOB were allowed to participate and the whole process was in violation of PPRA rules and clarifications, which restricted the competition and resulted in irregular procurements. Thus, irregular procurement of material valuing Rs3,395.35 million was made only from registered firms in violation of the rules.

The Railways officials replied that the Chief Mechanical Engineer/Loco has approved venders on FOB/FOR basis for the procurement purpose after passing through the set procedure. “These venders are approved keeping in view PPRA Rule-15 which supports the prequalification of the contractors. Tender bulletins were proceeded as per PPRA Rule-36(B) single stage two envelop system,” they said.

Further, they said that as per PPRA Rule-29 procuring agency formulated appropriate evaluation criteria and such criteria was made integral part of bidding process. “Thus, eligibility criteria was not in violation of PPRA Rule,” they claimed.

The Railway secretary told the PAC committee that it was a project for the repair of 100 locomotives.

Examining another audit Para with regard unauthorized commercial use of land leased to Al-Shifa Trust Eye Hospital Sukkur for welfare purposes, audit officials said that this land was being used for commercial purposes as the hospital sub-leased the land, established a wedding lawn, and allowed the installation of mobile towers, causing a loss of Rs460 million to Pakistan Railways due to commercial purposes. Secretary Railways told the committee that action was being taken against responsible. The PAC directed action against the railway officials involved within 10 days and submit the report to the committee.

While examining another audit objection with regard misappropriation of HSD oil that caused a loss of Rs506.63 million, the audit officials told the committee that during audit of HSD Oil Utilization for the FY2021-22, it was observed that as per rmoord (GM-31) a quantity of 5.03 million liters HSD oil was shown as available in fuel tanks of 203 locomotives at Karachi, Rohri, Samasatta and Rawalpindi sheds. “Whereas, fuel tanks capacity of these locos was 1.42 million liters only,” they told the committee.

The audit apprehended that if the fuel tanks of these locomotives were filled to full capacity, even then the quantity of 3.61 million liters HSD oil valuing Rs506.63 million was in excess to available capacity and hence stands suspicious. This indicated that fuel valuing Rs506.63 million was misappropriated and misreported in record as available in fuel tanks of locomotives.

The management of Railways replied that Audit observation is correct but it took 50 years to pile up this figure. The secretary railways told the committee that explanation has been sought while the inquiry has also been ordered and all things will come out in the inquiry report. PAC chairman remarked that he thinks that it should be sent to NAB. The committee has sought a report on the matter within 10 days.

The committee also examined the audit objection regarding payment of irregular fixed daily allowance to Railway Police and the audit officials told the committee that fixed daily allowance of 20 days was received by all the Railway Police personnel. Secretary Railways told the committee that this allowance was before his charge and he stopped it. The committee recommended regularization of the matter.

While examining another audit objection with regard loss of Rs805.20 million due to non-imposition of penalty on contractors, the audit officials told the committee that during the audit of Karachi Bunder Dry Port in March 2023, it was observed that M/s Ocean Mark and Ms Irfanullah failed to provide 06 trains per month. The contractors failed to provide the committed freight business as per provision of the agreements but penalty clause regarding short transportation was not invoked. Thus, Pakistan Railways suffered loss on account of non-imposition of penalty amounting to Rs805.20 million during July 2021 to January 2023.

These issues cumulatively hampered the efficient utilization of railway stock and caused unnecessary delays, which did not serve the interest of revenue generation.

Earlier, prior of the PAC meeting, an in-camera internal meeting of the PAC members was held in which the issue of removal of electricity meters of PAC member Sanaullah Mastikhel’s came under discussion. Sanaullah Mastikhel pardoned the Fesco officials who removed his electricity meters. The secretary Power Division said that Fesco officials have apologized for this matter.