Category Archives: corruption Khapey
After the recent admission by top government officials that the electricity crisis was a self-created phenomenon and a consequence of bad governance, Transparency International Pakistan (TIP) has now revealed that the private power producing companies are allegedly involved in adding fictitious production costs to the expenses to avail additional income amounting to Rs100 billion per annum.
This alleged fictitious cost which forces the ordinary power consumers to pay more, has been an unchecked practice for the last ten years. According to AdilGillani, the TIP adviser, an influential power cartel is involved in this huge corruption with the connivance of government authorities. The TIP has approached the SECP to check this massive corruption by conducting a cost audit of IPPs and fertilizer manufacturers under Companies Cost Accounting Records (General Order), 2008. Gillani said that so far SECP too had been reluctant to perform its obligations.
While formally approaching the SECP, the TIP has also informed the Supreme Court of Pakistan (SCP), Public Accounts Committee (PAC), chairman NAB and ministers of finance, petroleum and water and power about this matter.
In his communication to the SECP, Gillani said that the TIP has received complaints that private power producing companies like KESC & IPPs and fertilizer manufacturing companies are alleged to be involved in fictitious loading of production costs, to extort additional income, as their final prices are determined by regulatory authorities, on cost plus basis, structured on their productions costs.
“It is reported that more than 50 IPPs and fertilizer manufacturers have been involved in this malpractice, and have been availing additional benefits in connivance with the regulatory authorities for the last ten years of over Rs100 billion per annum. The sale prices are determined by the relevant regulatory authorities based on the production costs submitted by these firms.” The TIP, in its complaint said that following acts and manipulations are being done by these firms to artificially inflate the production costs: 1. Furnace oil is procured with additional 3 per cent to 5 per cent mark-up paid to guarantee cover. The seller has back-to-back agreement to refund it to the procurers after retaining 0.5 per cent of this amount. 2. Operation and maintenance costs are exaggerated. 3. Monthly fee charges paid for technical services and consultancy costs. 4. Over invoicing the cost of material and goods procured. 5. Exaggerated input consumptions. 6. Subcontracting various operations at inflated costs, and back-to-back arrangements with subcontractors to refund 90 per cent of extra payments made. 7. Fictitious contracts.
The TIP asked the SECP to conduct an audit of the accounts of all KESC & IPPs and fertilizer manufactures, so that the additional costs charged by these firms, if any, are determined, and the nation gets relief by depositing in the national exchequer account all such overpayments claimed from public and those found involved in this malpractice are taken to task under the laws of land.
Source : TIP
ISLAMABAD: National Accountability Bureau (NAB) chairman Admiral (retd) Fasih Bukhari’s latest disclosure that
Pakistan loses up to Rs8 billion a day in corruption, has exceeded even the otherwise massive corruption figures of Transparency International Pakistan (TIP).
The TIP has evaluated that corruption of Rs8500 billion took place during the first four years of the PPP regime (led by the sacked PM Gilani) but the per day corruption figure — Rs8 billion — as now given by the NAB chairman, means a corruption figure of Rs2.9 trillion in one year and Rs11.6
trillion in four years.
Recently, in an informal chat with The News, the NAB chairman had told this correspondent that that oil mafia, agriculture cartel and tax evasion/theft contribute to a daily loss of Rs5 billion, which meant Rs150 billion in one month and Rs1,800 billion a year.
However, on Saturday while addressing a press confer
ence, the NAB chairman said that more than Rs6 to Rs8 billion corruption occurs in a day in the country. This disclosure of the NAB chairman has given far gloomier picture as compared to the TIP in respect to mounting corruption in Pakistan.
The Transparency International had recently reported
that Pakistan had lost more than Rs8,500 billion (Rs8.5 trillion or $94 billion) in corruption, tax evasion and bad governance during the four years tenure of the recently sacked Gilani’s regime but these figures were strongly contested by the PPP government and its leaders.
Although the NAB chairman did not give the details of the ma
ssive corruption in Pakistan but the TIP had pointed out corruption of Rs390 billion in 2008, Rs450 billion in 2009, Rs825 billion in 2010 and Rs1,100 billion in 2011 under the present government. The total corruption from these identified cases is Rs2,765 billion.
In addition, according to the TIP, the minister of finance of the government himself confirmed corruption in the FBR of over Rs500 billion per year, which makes the total Rs2,000 billion; the auditor general of
Pakistan pointed out Rs315 billion corruption in 2010; Public Accounts Committee recovered Rs115 billion in 30 months till 2011; circular debt is Rs190 billion; KESC was given Rs55 billion illegal benefits per annum since 2008; state-owned enterprises like PSO, PIA, Pakistan Steel, Railways, SSGC, SNGC are eating away Rs150-300 billion per annum; the tax to GDP ratio in 2008 was 11%, which in 2011 has come down to 9.1% instead of being increased.
During the Gilani’s regime, his government’s perception
worldwide has been one of the most corrupt in the world as the corrupt and plunderers of national wealth were protected, rewarded and even offered key positions instead of being tried and pushed behind the bars. It was because of the bad repute of the regime that even during times of natural disasters like devastating floods, which hit Pakistan in the recent years, the world capitals opted not to give anything in cash to the PPP government.
Ironically the anti-corruption state institutions like NAB and FIA have been filled with tamed and tainted officials to protect the corruption of the mighty and powerful. The NAB chairman though talked to the massive corruption, he and his organisation did little to curb the same. Instead th
e NRO corruption cases have been settled to the advantage of the accused through friendly prosecution of the NAB.
In regard to the corruption cases of the PPP’s present tenure like Haj scam, Pakistan Steel plunder, Railways corruption, Rental Power loot and others, neither the FIA nor the NAB probed the cases fairly only because of the involvement of their political masters. No less than the Supreme Court, has repeatedly expressed its dissatisfaction over the role of the NAB and FIA in protecting the corrupt.