ISLAMABAD, April 13: The audit department has detected irregularities of over Rs677million in the accounts of the railways.

A report of the auditor-general attributed the irregularities to weak management, non-compliance of contractual obligations and vulnerability of the department’s assets.

It said the railways procured relief train cranes and re-railing and rescue equipment for Rs287.4 million from two German companies in a non-transparent manner and in violation of the basic tender rules.

The administration floated international tenders for the procurement of relief train cranes in March 2002.

Twelve firms purchased the tender documents and six of them participated in the bidding. The technical committee declared the offer of Demag Mobile Canes of Germany as suitable and all other offers unsuitable.

The tender committee decided to procure cranes from Demag for Rs268.47million.

International tenders were also floated for the procurement of re-railing and rescue equipment in March 2002. Nine firms purchased the documents of whom three participated in the bidding.

The technical committee declared that only the offer of Lukas Hydraulik of Germany was suitable. It was decided that the machinery would be purchased for Rs18.94 million.

The report said that since only one bid had been opened in each case the tender process failed to meet the criterion of minimum competition. It said fresh tenders should have been invited.

According to the audit department, the railways failed to recover Rs75.425million from the Awan Trading Company in a contract related to the transportation of imported coal upcountry.

It suffered a Rs34.69 million loss because of late supply of high-speed diesel (HSD) by the Pakistan State Oil (PSO).

During the audit of fuel for 2004-5, it was noticed that the PSO had not supplied the minimum agreed quantity of HSD for five months. Petroleum prices were fixed on fortnightly basis and the delay meant huge financial losses.

The PSO supplied 56.33million litres of HDS instead of 82.5 million litres.

The audit also detected numerous other cases of wasteful expenditure, non-recovery for oil marketing companies’ dues and irregularities in construction.

It found that the Quetta division superintendent had failed to sell scrap, including narrow-gauge wagons and coaches, worth Rs78.72million. The Bostan-Zhob rail section had been closed in 1985 but the material had not been disposed of and its condition was deteriorating.