OGDCL’s policy for auctioning old vehicles comes as surprise

ISLAMABAD: The sub-committee of Public Accounts Committee (PAC) on Thursday expressed surprise over the OGDCL’s policy allowing its employees to purchase used vehicle from company’s pool at a throw away price.

The audit officials informed the committee which met here with Syed Naveed Qamar in the chair to discuss audit paras of the company for year 2002-03 that in one instance, the company’s management gave way a car with book value of Rs 1.3 million to its own employees at Rs 1,30,000 without any auction.

The audit officials said a total of 72 vehicles were also given to the company’s employees at lowest price.

Managing Director, OGDCL, Riaz Khan said his company was pursuing a formula for offering a vehicle to its own employees with 10 percent depreciation cut on book value of the vehicle.

Thus, he added, his management was doing no wrong and the same practice was in vogue in other companies as well.

For other people, he said, the company put its condemned vehicles on public auction after strictly following a transparent criterion.

The committee said that loot and plundering should be immediately stopped and directed the company’s high officials to present a complete report on auctioning mechanism as to how the vehicle’s value was gauged and how the depreciation value was determined for ensuring transparency.

The panel also expressed dismay over to found OGDCL officials clue-less and ill-prepared on certain audit paras, saying that just quoting courts or that NAB or FIA were involved were not sufficient and the audit paras should be properly addressed and verified.

The audit officials said there was loss of Rs 66.893 million due to non-recovery of liquified damages, whereas clause 42.1 and 42.4 of the contract agreement of the OGDCL stipulates that liquefied damages charges at 1 percent per week subject maximum of 10 percent of contract price was to be imposed in case of delay.

They added the development of UCH gas project was undertaken by the OGDCL in 1994-1995 through three engineering procurement, construction contractors on turnkey basis. The project was belatedly completed and capitalized in June 2000 resulting in time overrun by 100 percent.

It was found that M/S Gregory and Cook of USA were to complete upstream facilities like production facilities.H2S Removal plant, Dehydration plant, power generation system and water supply system.

They contended there was an inordinate delay in completion of these activities and as such M/S Gregory and Cook. USA was liable to pay LD charges at 10 percent of the contract price, amounting to Rs 653.565 million(US$ 11.883 million) and Rs9.328 million.

The loss occurred due to non-recovery of LD charges from the contractor as per requirement of contract.