PAC chief clears all objections on defence purchases without scrutiny

Updated 10 Jan 2020

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The audit report had objected that the naval headquarters negotiated a proposal for procurement of weapons and sensors for boats from a Chinese firm. — AFP/File
The audit report had objected that the naval headquarters negotiated a proposal for procurement of weapons and sensors for boats from a Chinese firm. — AFP/File

ISLAMABAD: The newly elected chairman of the Public Accounts Committee (PAC), Rana Tanvir Hussain, has cleared all the 14 audit objections raised by the Auditor General of Pakistan (AGP) on procurements made by the army, navy and air force.

Mr Hussain, in an audit of the defence production ministry’s accounts for 2012-13, cleared these paras without even examining them separately.

The leniency shown by Rana Tanvir, who succeeded PML-N chief Shahbaz Sharif as PAC chairman, appears to have perturbed even some members of his own party. Former speaker Sardar Ayaz Sadiq remarked in a lighter vein that he might write a note of dissent for settlement of the audit paras in haste.

Likewise, Noor Alam Khan of the Pakistan Tehreek-i-Insaf (PTI) and Syed Naveed Qamar of the Peoples Party disapproved of settling the audit paras without perusal.

Mr Hussain even expressed displeasure over framing of rules for the Public Procurement Regulatory Authority (PPRA) in a manner that results in audit objections and leads to creation of audit paras after two officers in uniform struggled while trying to justify procurement of weapons without following rules.

A member of the National Assembly said such rules had landed a good number of opposition legislators in jail.

“We are reviewing these rules,” said Finance Secretary Naveed Kamran Baloch. He said the finance ministry was examining a proposal made by the PPRA for improving rules. The finance secretary acts as the regulatory body’s chairman.

The audit report had objected that the naval headquarters negotiated a proposal for procurement of weapons and sensors for boats from a Chinese firm. The firm initially offered to supply the sensors at a cost of $13.9 million per system. Since the amount was considered too high, the navy held fresh negotiations with the firm, after which the latter agreed to bring down the quoted price to $10.3m per boat with some changes in specifications.

According to the objection, the contract was not subject to change. The audit, however, left it to the PAC to settle the objection.

The report pointed out irregularities in the upgrade of 24 F-16 aircraft.

The auditors recommended that the director general of Defence Purchase take up the matter with the Finance Division.

The audit report further pointed out that according to the contract for procurement of Heavy Sniper Rifles, “the supplier shall be bound to extend the validity of bank guarantee and in case of unsatisfactory performance, the same will be forfeited”.

However, the encashment process could not be processed timely as a result of that performance bank guarantee expired and the bank issuing the guarantee refused to encash it, which resulted in the loss of Rs65.63 million.

The audit observed that directorate general procurement (army) and military accountant general were responsible for that lapse. However, the military accountant general has informed the departmental accounts committee that the matter has been inquired and the action has also been taken in this regard.

Subsequently, the audit recommended that the para may also be settled.

Published in Dawn, January 10th, 2020