ISLAMABAD, July 24: In its audit of the Capital Development Authority (CDA) accounts of fiscal year 2010-11, the Auditor General of Pakistan (AGP) has identified Rs12.36 billion misappropriations and objections.

Out of the 77 audit objections, the AGP detected the biggest loss of Rs2.91 billion in the allotment of land at low price to the Air University, which is a private enterprise and charges its students high fees.

The AGP report has highlighted that Director Estate Management-II allotted land measuring 70 acres (338,800 square yards) in H-11/2 on 33-year lease to Air University at Rs4,500 per square yard instead of Rs13,100 per sq yard as notified by the finance wing of the CDA.

The audit report said the CDA had offered the same land at Rs7,400 per square yard in September 2010 during negotiations with the Higher Education Commission (HEC), which was mediating the agreement.

The CDA told the HEC since the Air University was a private entity and was functioning on commercial basis it should pay Rs7,400 per square yard.

The auditors have identified that the lower rates were not applicable since the Air University was charging commercial fee from the students which is higher than the fees charged by public sector universities. However, the CDA later agreed to lease the land at reduced prices of Rs4,500.

Another major misappropriation of Rs2.60 billion has been reported in the unauthorised rescheduling of payment relating to a plot by Pak Gulf Construction Company.

In a similar case the office of the CDA director project management did not cash the bank guarantees provided by Pak Gulf Construction Company even when the company stopped payments of its monthly instalment for the plot it purchased. There is another audit objection related to the same case amounting to Rs816.27 million.

The auditors have highlighted that the CDA enhanced the rock excavation rates to National Highway Authority at Zero Point Interchange, by manifolds after the project approval.

It highlighted that the rates quoted by the NHA at the time of filing bids were Rs521.49 per cubic meter for hard rock, Rs333.40 per cubic meter for medium rock and Rs270.38 per cubic meter for soft rock.

However, the NHA enhanced the rates to Rs1,464.42, Rs1,065.00 and Rs960.84 respectively which were accepted by the CDA Deputy Director Roads Division-I on the grounds that the rates quoted by the NHA were for rock excavation through blasting which could not be done at Zero Point and the NHA had to use earthmoving machine.The audit report said the NHA quoted rates as per their schedule and after inspection of the site but after obtaining the contract, it enhanced the charges significantly causing a loss of Rs66.50 million to the CDA.

There are various references and objections amounting to Rs1.2 billion which include irregular award of works without tendering, The Deputy Director Building Control Section-III failed to charge Rs275.10 million for additional floors from 4th to 10th on a building of Pakistan Red Crescent Society.

In another case, the CDA placed six category-I plots measuring 600 sq yards each and three category–II plots measuring 356 sq yards each in I-8 sector at the disposal of Federal Government Employees’ Housing Foundation. It doled out the plots from its quota through Director Estate management –I, without any approved policy.

The auditors have recommended strict internal management controls in the CDA, where the objections and recommendations of the finance department are either overruled or ignored.

Besides, the recovery departments should develop follow-up mechanism.