PAC audit reveals funds’ misuse

ISLAMABAD:

It was revealed during a meeting of the parliament’s accountability arm that a portion of the fund collected for energy projects was used to pay off loans.

The Public Accounts Committee (PAC) met on Tuesday under the chairmanship of Junaid Akbar, who belongs to the PTI. During the meeting, 175 audit paras amounting to Rs4.238 trillion from the Petroleum Division and its subordinate departments were presented.

The PAC conducted a detailed review of audit paras exceeding Rs3.178 trillion related to the Ministry of Petroleum and its affiliated departments.

The audit report on the Iran-Pakistan gas pipeline project revealed that as of June 30, 2023, Rs350 billion had been collected under the Gas Infrastructure Development Cess (GIDC).

This amount was intended for major projects, including the Iran-Pakistan gas pipeline and the Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline project.

However, Rs3.7 billion from the GIDC funds were used to pay off loans. Committee members said the GIDC was collected from the public and should have been spent on its intended purpose.

Petroleum Division officials responded that international sanctions prevented the allocation of funds to the Iran-Pakistan gas pipeline project.

MNA Hina Rabbani Khar of the PPP, who has also served as the country’s foreign minister, questioned why the GIDC was collected from the public if global sanctions were in place.

She recommended that the Rs350 billion GIDC funds be redirected to alternative projects. The PAC sought proposals from the Petroleum Division within a month regarding the utilization of GIDC funds.

The secretary petroleum stated that the GIDC law was introduced in 2015, and in 2020, the Supreme Court declared it void. He said efforts were underway to resolve disputes with Iran over the pipeline project and that GIDC funds were being utilized for reconciliation efforts.

He disclosed that Rs1 billion had already been spent on the TAPI project and offered to provide an in-camera briefing on the Iran-Pakistan gas pipeline project.

During the meeting, it was revealed that Rs33 billion in gas development surcharge (GDS) for the fiscal year 2022-23 was under-collected from fertilizer and power companies.

PPP’s MNA Naveed Qamar asserted that the federal government had no right over GDS and that collecting provincial revenues was not a federal priority. He accused the government of favoring fertilizer companies at the expense of provincial rights.

The director general of gas clarified that the under-collection of GDS was due to subsidies provided to the fertilizer sector.