name='verify-v1'/>"> MediaTrial: Mom & pop company rakes up quake victims’ funds

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Saturday, December 12, 2009

Mom & pop company rakes up quake victims’ funds

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Despite sharp focus of the entire nation, the media, the judiciary and politicians, a top executive of the NWFP’s Erra, an organisation supposed to help earthquake victims, unabashedly formed a mom & pop company and awarded all tractor contracts to his daughter while his wife ran the company’s bank account running into millions of rupees.

An official inquiry into the alleged unique fraud involved the topmost executive of the Provincial Earthquake Reconstruction and Rehabilitation Authority known as PERRA in the procurement of “poor quality” tractors for the quake-affected areas.

The whole deal was done in a manner that everything was kept within the family, the father bought the machinery, his daughter’s company sold the machinery and the money went into the account of his wife.

PERRA Director-General Nasir Azam, however, explained his daughter’s company is carrying out the tractor business since 1999 and denied he had either manoeuvred anything or given approval to this purchase from PERRA funds. The tractors purchased were found to be of poor quality and not suitable for use in hilly areas.

The Earthquake Reconstruction and Rehabilitation Authority (Erra), which is part of the Prime Minister’s Secretariat, is pressing the NWFP chief minister to remove the PERRA director-general, book him and hold inquiry against all others involved, but the provincial government is unmoved.

A source in the Chief Minister Secretariat said NWFP Chief Minister Amir Haider Hoti is allegedly protecting the officer, who is closely related to him. Sources close to the chief minister, however, insist Hoti would take decision on merit.

The PERRA director-general confirmed his relationship with the chief minister, saying the chief minister’s brother is his brother-in-law. Sources said three inquiries, one conducted by the provincial inspection team (PIT), second by the NAB and the third by the Erra, probed the matter but no head had rolled as yet. Interestingly, the provincial inspection team (PIT) confirmed the fraud but it recommended action against two local officials of Manshera and did not suggest anything against the Perra director-general.

The NAB and the Erra, however, found the director-general as the major player in this alleged fraud. Documents shared with The News by a Chief Minister Secretariat source show the federal government has formally approached NWFP Chief Minister Hoti as well as the chief secretary for action against the Perra director-general and others involved.

According to Erra’s inquiry, a PC-I for solid waste management for the Tehsil Municipal Administration (TMA) Mansehra was approved by the district earthquake authority on November 11, 2007, at a cost of Rs 26 million, cleared by the Project Evaluation Cell (PEC) of Erra on December 18, 2007, vide letter No 104(8)/ERRA/P/PEC/07.

In the said original PC-I, excavator, water bouzer, two dump trucks (mini), sewerage clearing machine, 100 wheel burrows, wireless system and 150 waste bins were to be procured.

Later, the original PC-I was revised to Rs26.432 million whereby the former four machinery items were substituted by 25 tractors. As a matter of policy and rule, the inquiry said, the revision ought to have been made by the competent forums but the PERRA director-general by violating the procedure/rules accorded approval on his own.

After revision an advertisement was floated in newspapers for purchase of small tractors on February 2009 but the ad contained certain shortcomings and lapses including: i) eligibility and qualification criteria for the prospective bidders was not mentioned; ii) the response time was less than what is prescribed in PPRA; and iii) bid documents/tender documents were not prepared. The report said the official record revealed a committee comprising PERRA director-general Nasir Azam, TMA Manshera Abdul Rehman and other local officials, including Ajmal Khan, Abdul Latif, Tehsil Officer, TMA, Mansehra and Muhammad Javed recommended the purchase of tractors. A total of 49 (25 and then 24) tractors were purchased.

Non-observance of proper procedure of procurement as per PPRA rules, the report said, led the entire process to faulty procurement and none of the participating bidders was eligible to bid. There are two different comparative statements available on record of participating bidders. In the first statement, the bidders were: Ayesha Enterprises, New Holland Attock, New Holland Haripur, Falcow Associate Peshawar and National Machinery Store Haripur; whereas in the second statement, the bidders were Ayesha Enterprises, Gull enterprises, Ahsan traders and Falcow Associates.

In both the statements, M/s Ayesha Enterprises has been shown as the lowest bidder and the cost per tractor with trolley was same as Rs460,000. It is also a matter of concern that none of the bidders has submitted quotations on the proper letterhead of the company, where no registration/NTN was mentioned, which proved that none of the firms/bidders was eligible for award of contract.

The report said a total of Rs11.339 million was paid to M/s Ayesha Enterprises for purchase of 25 tractors. According to prevailing market rates, the unit cost per tractor is exorbitant. Consequently the public exchequer had to sustain loss of Rs4.310 million as per inquiry report already completed by the PIT.

According to rules, no payment can be disbursed to a company/firm, which is not GST registered while the finance wing of PERRA made payment to M/s Ayesha Enterprises without proper invoice and without ascertaining GST registration of the supplier.

The ERRA report said the PIT recommended action against only two officers, i.e., Mr Abdul Rehman, TMO, TMA, Mansehra and Mr Abdul Latif, TOI, TMA, Mansehra under the NWFP Removal from Services Ordinance, 2000, besides seeking recovery of the loss.

ERRA wondered how come the PIT simply ignored the PERRA director-general, who had acted as head of the purchase committee. “The purchase committee in its entirety is responsible as it failed to dispense its obligations while awarding the contract to a firm whose credentials are questionable,” the report said.

The most interesting findings of these inquiries are that all the payments were made to Account No: 3255 maintained by M/s Ayesha Enterprises in the National Bank of Pakistan, Civil Secretariat, Peshawar.

M/s Ayesha Enterprises is owned by the PERRA director-general’s daughter while the account is being operated by Ms Amna Nasir, wife of Mr Nasir Azam. Moreover, Nasir Azam has been nominated as next of kin for the account.

On the basis of its inquiry, Erra sought recovery of the entire amount paid to M/s Ayesha Enterprises on account of purchase of forty-nine (49) tractors from Nasir Azam, PERRA director-general being the actual owner of the firm. It also recommended registration of a criminal case of fraud against the officer. In addition, it also seeks disciplinary proceedings against all other members of the committee under Removal from Service Ordinance, 2000.

The PERRA director-general when contacted denied he had done any corruption and insisted her daughter’s company was involved in the tractor business since 1999 and has so far sold 800 tractors. He said the company is registered and its records could be verified from the FBR.

He denied he was chairman of the procurement committee and said he never gave any approval for this purchase. He said he had only given his certification at the time of payment made to his daughter’s company. The TMO Manshera told the inquiry committee that tractors being of poor quality are not suitable for use in hilly areas.

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