Railways posts over Rs55bn loss in FY23

Published October 11, 2023
The audit report blames incompetence, irregularities, illegalities and bad governance for the massive losses suffered by Pakistan Railways.—Dawn/file
The audit report blames incompetence, irregularities, illegalities and bad governance for the massive losses suffered by Pakistan Railways.—Dawn/file

LAHORE: Pakistan Railways suffered a loss of over Rs55 billion during the last fiscal year (FY23) due to incompetence, irregularities, illegalities and bad governance.

According to an audit conducted by the Auditor General of Pakistan (AGP) for the fiscal year 2022-23, the performance of the department, which used to seek help from the federal government to clear pays and pensions of its employees, was evaluated on three major areas — governance, risk management and controls.

The segregated analysis of fiscal year’s observations depicted that governance issues in administration and Public Sector Development Programme (PSDP) projects were of more serious nature than risk management and controls.

This situation showed that there was a loose oversight of the senior management over the efficiency and effectiveness of operations and compliance with applicable laws and regulations.

The audit found non-recording of accrued liability on account of interest and exchange risk premium on foreign loans of Rs29.35 billion, a loss of Rs19.80bn on account of potential revenue due to non-completion of projects within the scheduled period, non-adjustment of suspense balances of Rs12.64bn, excess expenditure over and above the allocated budget of Rs11.75bn, non-recording of accrued pension liability in financial statements of PR amounting to Rs8.25bn, a loss of Rs7.92bn to the department due to non-registration of Pakistan Railways Freight Transportation Company (PRFTC) with the Punjab Revenue Authority and loss suffered due to award of contract at a higher rate of Rs6.96bn, loss of earning due to non-operating of the track access agreements worth Rs6.10bn per annum and lack of fair competition and transparency in procurement of Rs5.09bn.

The audit report revealed that the department further suffered a loss of Rs5.05bn in the form of non-recovery of receivable bills, besides witnessing a loss to Rs2.07bn on account of devaluation of local currency due to delay in the finalisation of a bid and another Rs2.07bn due to suspicious weighment of coal.

Continuing with the same working style, the department further suffered a loss of Rs1.37bn on account of non-recovery of PRFTC dues from Huaneng Shandong Ruyi, non-disposal of scrap worth Rs866.95 million, Rs319.24m due to non-replacement of wrong/defective material, unnecessary procurement resulting in blockage of capital worth Rs179.77m, irregular expenditure of Rs115.53m on appointment of officers, Rs99.53m due to delay in handing over the electric system of railway colonies to Discos, Rs37.45m due to installation of reclaimed transformers and Rs45.147m due to misappropriation of material.

Published in Dawn, October 11th, 2023

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