LAHORE, Oct 23: A private company caused a loss of over Rs18 million to the Pakistan Railway from July 1998 to June 2005 and the amount has yet to be recovered from it, it is learnt.

“The Pakistan Railway Advisory and Consultancy Services (PRACS) did not observe a clause of the contract agreement it had executed with the PR, regarding running of city booking and current reservation agencies over the railways network,” sources told Dawn on Sunday.

Quoting a report recently submitted by railways audit Director-General Zafarullah Khan to the PR authorities, sources said the company did not deposit the earnings of the agencies with the chief cashier and treasure of the Pakistan Railways at its headquarters at Lahore and the same were collected by the National Bank.

Sources said the NBP charged 43 paisa for each Rs100 it collected for remitting the same into the railway fund maintained by the State Bank and the amount paid to the NBP as commission from July 1998 to June 2005 stood at Rs18.902 million.

The director-general asked the railways financial adviser and chief accounts officer (revenue) to “recover Rs18.902 million from the PRACS without any loss of time, ensure implementation of the agreement’s clause in letter and spirit and adopt remedial measures to avoid such recurrence in future.”

The financial advisor intimated the director-general the matter had been referred to railways ministry for seeking advice to recover the amount from the PRACS and “a reply is still awaited despite issue of reminder...”

The sources said the PRACS was handed over the first current reservation agency at Lahore on Sept 3, 1993. Later, some 51 city booking agencies over the network of the railways were given to the PRACS under a contract agreement.

At present, the PRACS is running 13 agencies at Karachi, 10 at Lahore, seven at Rawalpindi, four at Multan, three at Peshawar and two each at Islamabad and Hyderabad.

Abbottabad, Dera Ismail Khan, Faisalabad, Gujranwala, Mardan, Mansehra, Multan, Quetta, Raiwind, Swabi, Sanghar and Sukkur each have one city booking or current reservation agency being run by the PRACS over the PR network.

Furthermore, the Pakistan Railways was a federal government department and its employees public servants as recently declared by the Supreme Court, but the authorities were transferring and posting PR employees to the PRACS which was illegal, the sources said.

The PRACS was neither a public limited company, nor a subsidiary of the railways, according to the record of the Securities and Exchange Commission of Pakistan, they said.

A public servant, they said, could be sent to another government, semi-government department, autonomous body, corporation or a public limited company controlled by the government on deputation but could neither be transferred nor posted in a private company.

The officers work for the PRACS but draw their salaries from the PR which was also in violation of the government rules and regulations, the sources added.

The PRACS was registered under the Companies Ordinance-1984 with the Corporate Law Authority in 1984 which was made the Securities and Exchange Commission of Pakistan (SECP) in 1997.