RAWALPINDI, Dec 6: The Rawalpindi Cantonment Board (RCB) was facing a financial crisis and unable to pay its liabilities amounting to Rs154.551 million, well-placed sources in the RCB told Dawn on Thursday.

According to the sources, the RCB owed Rs128 million to Islamabad Electric Supply Company (Iesco), Rs13.584 million to private stores/workshops for purchase of various goods, Rs9.046 million to private contractors for different construction works within the RCB jurisdiction, Rs3.2 million to Phillips Electric Company for electrification of Peshawar Road and Rs0.721 million medicine bills to various medical stores.

Most of these dues have been outstanding since 1997. The sources said the RCB was under debt of Rs174.75 million in 1997, however, during the last four years, the RCB had managed to pay only Rs20.205 million, including Rs20 million to Iesco, Rs0.171 million to contractors and Rs0.034 million to various chemists as bills for the medicines purchased for the Board employees from time to time.

The sources said various exemptions given to serving and retired army people were the main cause of the present financial crisis. They said retired army officers had been totally exempted from payment of property tax while serving army officers were enjoying 70 per cent exemption. The property tax was the main source of income for the RCB and it had to incur a loss of Rs30.55 million every year, they added.

The sources told Dawn that the RCB had also demanded of the federal government to abolish this exemption or make payment to the civic body as a compensation for the big loss. The sources termed this exemption as unjustified as even lower ranking army officials owned properties worth millions of rupees, but they didn’t pay any tax. “Besides this, army officials are reappointed on lucrative posts in government, semi- government and private organizations after retirement, but they don’t pay even single penny to the RCB kitty as their properties are shown as owned by retired persons”, they added.

Another reason for the financial problems was the failure of the RCB officials to maintain record of various taxes, rents and water charges, the sources said. They said now the record was being computerized and hopefully the things would improve soon.