LAHORE: The Lahore Waste Management Company (LWMC) has asked the Anti-Corruption Establishment (ACE) to investigate the whopping Rs6 billion expenditure on repair, maintenance and petrol for the company’s operations and staff vehicles since the company’s inception in 2011-12.

The company is holding its respective managing directors (MDs) responsible for approving the procurement process for vehicles by going beyond the financial powers delegated to them that restricted them from spending more than Rs20m through the management procurement committee.

The company has sought the ACE director general to get this reference investigated, fix responsibility and recover the misappropriated public money.

A report of the company’s chief internal auditor (CIA) has also been provided to the ACE that identified expenditure of Rs5.927bn by the previous company MDs while violating their delegated financial powers of up to Rs20m.

Internal auditor holds MDs responsible for approving expenditures more than allowed

LWMC Board of Directors Chairman Riaz Hameed Chaudhry confirmed to Dawn that a reference had been sent to ACE Punjab for judicious investigation and fixing of responsibility regarding misuse of public funds.

He said the company had also sent a reference to the Chief Minister’s Inspection Team (CMIT) to ascertain the legitimacy and legality of two contracts involving around Rs1bn.

Asserting that the wrongdoings of the past must be corrected and those responsible taken to task, Mr Chaudhry said: “Financial mismanagement in the company since its inception has increasingly become a case study in corruption and squandering of public resources.”

In order to plug the pilferages, he said the board of directors had directed the company management to formulate inventory pertaining to vehicles’ assessments to evaluate whether they were repairable or not. “The huge money spent on repair and maintenance of the company’s rusted vehicles could have been used to purchase new vehicles,” he stressed.

The company’s CIA in his report identified that the respective MDs till Dec 31, 2019 went beyond their delegated financial powers and spent Rs3.217bn on workshop repair expenses as well as used fuel worth Rs2.71bn.

The auditor stated that the estimated cost of the annual work was not provided in the pre-qualification documents to enable the bidders to know the volume of work to help potential bidders quote competitive bids.

Besides unilaterally adopting the calendar year as procurement period instead of financial year in line with the company’s financial period, the auditor found that the adopted procurement process since inception of the LWMC was against the company policy as well as Public Procurement Regulatory Authority Rules 2014 and Public Sector Companies (corporate governance) Rules 2013. “The respective MDs approved procurement beyond their financial delegated powers that can be construed all as mis-procurements,” the auditor’s report stated.

He explained that the company spent around Rs400m a year for repair and maintenance of vehicles – containers, operational and staff vehicles -- and around Rs330m for POL per year.

In the year-wise report, the auditor stated that the company spent Rs366.25m for the repair of the company’s 575 vehicles in 2011-12 and Rs404.7m on the repair of 400 vehicles in 2012-13. In 2013-14, it spent Rs308.428m on the repair of 301 vehicles.

The company used 379 vehicles from 2014-15 till Dec, 2019, and spent Rs292.81m in 2014-15; Rs343.551m in 2015-16; Rs400.665m in 2016-17; Rs451.813m in 2017-18; Rs410.571m in 2018-19; and Rs238.173m in the first half of financial year 2019-20.

According to the break-up of Rs2.71bn spent on POL for the vehicles, the company spent Rs641.831m in 2011-12 and Rs394.114m, Rs221.142m, Rs200.387m, Rs215.879m, Rs273.046m, Rs278.253m and Rs330.359m in the following financial years, respectively till 2018-19. In the first half of 2019-20, the company has spent Rs155.267m on vehicles’ POL.

CMIT: The LWMC has also sent a reference to the Chief Minister’s Inspection Team (CMIT) to ascertain the legitimacy and legality of two specific contracts involving around Rs1bn, which were extended by the management through the procurement committee during 2018.

The contracts were awarded to M/S Skills Hub for supply of manpower to LWMC and MBS Multan for cleaning and other office-related work at Rs235m and Rs745m, respectively.

The CMIT has been asked to initiate inquiry after formal approval by Chief Minister Usman Buzdar.

Meanwhile, incumbent LWMC MD Rao Imtiaz Ahmad has informed the government that the same contract had been retendered by the company and expected annual saving of Rs94m.

The LWMC BoD chairman said the management in the current financial year saved around Rs987m through cost-cutting initiatives.

Published in Dawn, March 16th, 2020