Audit Finds Irregularities of Over Rs 70 Billion in Pakistan Railways in 2017-18

The Auditor General of Pakistan (AGP) has detected misappropriation, irregularities, mismanagement and operational inefficiencies of over Rs 70 billion in Pakistan Railways.

The audit report on the accounts of Pakistan Railways for the year 2017-18 revealed:

• theft, embezzlement and blockage of capital worth Rs 27.56 billion (39%)
• issues related to Railways land worth Rs 27.66 billion (39%)
• recoveries pointed out worth Rs 11.336 billion (16%)
• issues related Public Sector Development projects worth Rs 3.9 billion (6%)

In six cases, auditable record was not provided for audit scrutiny.

The total operational working expenses amounting to Rs 80.38 billion were much higher than the gross earnings of Rs 40.064 billion and resulted in an operational loss of Rs 40.316 billion.

Encroachment of Railway land valuing Rs 26.64 billion was noticed in the Audit. It was observed that 6487 acres land valued at about Rs 13.21 billion was encroached by individuals, government departments and defense due to Railway’s negligence. The AGP recommended that action be taken for early retrieval/regularization of land and responsibility be fixed against those found negligent.

The audit further observed that PR sustained a loss of Rs 13.557 billion on account of inordinate delay in repair of locomotives. Further recoverables amounting to Rs 10.013 billion were noticed in the report.

The AGP pointed out that blockage of capital worth Rs 5.56 billion due to unnecessary procurement of material. It further pointed out unjustified hiring of locomotives from National Logistic Cell (NLC) costing Rs 2.55 billion, non-disposal of scrap valued at Rs 1.474 billion, extra consumption of fuel amounting to Rs 1.35 billion, non-recovery of Rs 1.047 billion on account of maintenance charges of level crossings and non-placement of material of wrong specifications or having defects worth Rs 629 million.

The Audit recommended that each case of embezzlement of Railway revenue, shortage and theft of material be investigated at an appropriate level for fixing of responsibility and remedial measures be taken to avoid recurrence of the issues.

The report noticed that Railways sustained a loss of Rs 366 million due to non-auction/construction of vending stalls, parking stands, and shops. Further theft of Railway materials valued at Rs 295 million was noticed as well.

The AGP recommended that Director Property and Land should make arrangements for retrieval of all encroachments, besides taking necessary corrective action in respect of all the deficiencies regarding the title of land.

Further internal controls should be strengthened and security arrangements improved to safeguard Railways land and other physical assets. Disciplinary action should be taken against the people at fault for non-production of record and strict instructions should be issued for timely provision of auditable record.