LAHORE: Identifying huge financial irregularities, Lahore Waste Management Company’s (LWMC’s) board of directors (BoDs) chairman Riaz Hameed Chaudhry has sent a reference to the Punjab local government and community development secretary for ascertaining the legitimacy and legality of the contract awarded by the Management Procurement Committee of the company during 2018-19.

The chairman has also sent a “confidential report about irregularities in LWMC” to the company’s managing director to take action and report to the board.

Asserting that he pointed out certain irregularities in the company that involved huge losses to public exchequer, the newly-appointed chairman has written to the Punjab chief secretary to place the services of four BS-18 officers from S&GAD with impeccable integrity and competence level (to replace the four general managers) at the disposal of the company on deputation so as to appoint them on key positions and control pilferage and wastage of government resources.

The BoD also directed the company management to fix responsibility and take strict action against the officials responsible for delay in re-tendering for outsourcing of labour contract by the company.

It is learnt that the BoD members through a circular resolution on April 6 this year allowed retendering of third-party workforce hiring contract as per PPRA Rules.

However, the company management after the lapse of 66 days brought the same issue in the 71st board meeting on July 12 without offering any documentary reasons of delay of the issue. The BoD extended the existing contract for 30 days and approved bidding documents for re-tendering of hiring the labour force. The board decided that no further extension would be granted. Again after 28 days, the company management presented the same matter in BoD’s 72nd meeting on August 9 and the board again extended existing contract till Sept 15 due to acute emergency created by the company management. “The board also clarified again that no further extension would be allowed,” it is learnt.

The chairman stated that the LWMC is paying around Rs800 million and Rs1.9 billion per annum directly to the third party in lieu of labour and indirectly reimbursable labour cost to the international contractors.

The issue of “hiring of labour” was flagged by the chairman in August 30 meeting chaired by the chief minister and the house endorsed hiring of labour through outsourcing model with minimum possible numbers of workers in fair, transparent and cost-effective manner.

For yet another time, the BoD in its 73rd meeting on Sept 16 “allowed extending the outsourced labour contracts of M/s Skills Hub Pvt Ltd for another 38 days i.e. till Nov 6, 2019, to complete the retendering process by strictly adhering to PPRA rules and time lines”.

Since company’s contract with its Turkish partners is expiring in February next, the company’s management is still clueless how to manage the period between Nov this year to Feb next.

Identifying workshop expenses for vehicles’ repair and maintenance to the tune of over Rs420 million as extraordinary, the board is also looking for the company’s forensic audit report. The board chairman asked the managing director to probe the issue of payment of Rs55 million Eidul Azha bonus to the outsourced labour contractor for the financial year 2018-19.

This year again, it is learnt, the company is facing agitation and strike threats in case the outsourced labour force would not be given Eidul Azha bonus like last year. The board in its recent meeting sought guidance from the law and finance departments to handle the situation.

When contacted, Mr Chaudhry said that he joined the company around three months ago with a mandate to eliminate corruption and ensure the implementation of Public Sector Companies Corporate Governance Rules and identified several administrative and financial irregularities seeking inquiries and fixation of responsibility so that the corrupt could be shown the door.

He said a reference against the company management had been sent to the Punjab local government department secretary to fix responsibilities with regard to the administrative and financial irregularities in the company. He said he would share the forensic audit report, when received.

Referring to stoppage Eidul Azha bonus for outsourced labour force, Mr Chaudhry said that the BoD had also curtailed company’s corporate employees’ bonus by offering the incentive on basic salary instead of running salary.

LWMC MD Ajmal Bhatti, who joined the company about two months ago, said the company was currently clueless about the priorities to move forward. “The only concern, being faced by the company is to develop a business model to move forward after Feb 2020,” he said.

He said there was no clear-cut vision whether the company would be adopting outsourcing model or hire labour on its own citing a decision made in board’s 49th meeting. “Different options are under consideration,” he added.

About company’s Management Procurement Committee stepping into BoD’s domain by extending labour contract during 2018-19, Mr Bhatti said the committee had taken decision in an emergent situation in the absence of board, which was de-notified by the incumbent political government after coming into power.

He said the inquiry into the delay in re-tendering for outsourcing of labour contract by the company had been sent to the BoD.

About Rs55 million bonus given to the outsourced labour force, Mr Bhatti said the company management had submitted before the labour force’s protests last year.

Denying that any forensic audit report of the company has so far reached him, Mr Bhatti said only a general presentation about the forensic report was given to him. He said he had written to the board to take action against the corrupt.

Published in Dawn, September 27th, 2019