PESHAWAR: Auditor General of Pakistan (AGP) has detected a non-recovery to the tone of over Rs.1.58 billion in the accounts of the Pakhtunkhwa Energy Development Organization (PEDO), a subsidiary of the Energy and Power Department of Khyber Pakhtunkhwa during financial year 2018-19 and directed its recovery, said Audit Report on the Accounts of Government of Khyber Pakhtunkhwa Year 2019-20.
The AGP Report has been tabled in the provincial assembly and for detailed deliberations the Speaker has referred it to the Public Accounts Committee (PAC) of the House.
According to contact executed with the different non-governmental organizations (NGOs) for the completion of 356 Mini/Micro Hydro Power Projects in 10 districts of KP, failure of the contractor to meet the time for completion entities, the employer to deduct from the contractor price, the liquidated damages @ 0.05% percent of the price of individual project delayed as quoted in the financial bids submitted by the contractor excluding provisional sums for each day, including holidays of delay or part thereof, but to a maximum limit of 5% of the price of individual projects delayed as quoted in the financial bids submitted by the contractor excluding provisional sums.
During the audit of the Pakhtunkhwa Energy Development Organization (PEDO) for the Financial Year 2017-18, it was observed that the 3rd revised PC-I for the 356 Mini/Micro Hydro Power Projects in Northern Districts of KP amounting to Rs.5501.66 million was approved by the Provincial Development Working Party (PDWP) in its meeting held on 29.09.2017.
The planned completion date for construction was June 2018 followed by the one-year Defect Liability (DLP) i.e., up to June 2019. However, the project could not be completed within the stipulated time. Therefore, liquidated damages under the subject clause of contract agreement amounting to Rs128,944,360 was required o be recovered from contractors for their inefficiency to complete the projects on time.
Audit has attributed the lapse to weak internal controls and pointed it out to the department in April 2019.
However, the department replied that detailed reply will be furnished later on and despite repeated requests of the Audit no meeting of the Departmental Accounts Committee (DAC) was convened till finalization of this report. So, the audit has recommended the recovery of the liquidated damages from the contractors.
In another case, an amount of Rs.30.857 million has not received from Machai and Shishi hydropower projects. The lapse was detected during the audit for the financial year 2017-18 and observed that in Machai Hydropower Project 2.6 MW, a total of 4,883,248 units of electricity were produced and exported from 2016 till June 2018, but revenue on this behalf was not received by the organization, because no proper contract agreement was made with the concerned authorities, resulting into an amount of almost Rs23,046,488 being outstanding (taking a rate of Pehur, i.e., Rs.4.7195 per unit).
Similarly, in Shishi Hydropower Project (SHPP), a total of 3,451,027 units of electricity were produced and exported to PESCO from July 2017 till June 2018 for a total amount of Rs10,353,081 against which only an amount of Rs.2,541,600/- was received leaving a balance of Rs7,811,481 as outstanding till date of audit.
The audit has attributed the lapse to weak internal controls and when pointed out in April 2019, the department stated that the Energy Purchase Agreement (EPA) of Machai HPP is under process with PESCO and soon it will be finalized. The said amount will be recovered after signing of the EPA with PESCO.
Despite, the repeated request of the audit for convening a meeting of the Departmental Accounts Committee (DAC), no meeting was convened till finalization of this report, so the audit directed the recovery of the amount.
In another case, an amount of Rs.1.421 million was also not recovered on account of electricity charges from PESCO for 399,468,960 KWh units produced by Pehur Hydro Power Project (PHPP) and exported to PESCO at the rate of Rs.1 per KWh against which an amount of Rs.319.364 million was received and the balance amount of Rs.80.104 million was outstanding against the distribution company.
Audit has attributed the lapse to violation of rules and regulations and when pointed out in April 2019, the department stated that since operation of the powerhouse, the organization is receiving revenue at the rate of Rs.1 per unit, as such arrears of Rs.1.421billion has been accumulated against PESCO, which will be materialized after signing of the Power Purchase Agreement.
Audit repeatedly requested the holding of Departmental Accounts Committee (DAC) meeting. However, no DAC meeting was convened till finalization of this report; so the audit has directed the recovery of the outstanding amount.
Copyright Business Recorder, 2023
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