Rs118bn irregularities unearthed in communications ministry: report

ISLAMABAD: The public accounts committee (PAC) of the National Assembly has ordered a probe into alleged misuse of funds reserved for the digitaliisation of Pakistan Post, a report said citing sources.

According to the report that appeared on PTBP magazine, an online portal, funds to the tune of Rs118 billion, meant for digitalisation of financial services of some 12,000 post offices across the country, are said to be misappropriated in a contract with a leading private bank.

The project was launched in 2018 when former secretary Saqib Aziz launched a project for digitalisation of manual accounting apparatus of the entity for accurate and real-time transfer of data to Auditor General of Pakistan (AGP) and Finance Divison.

The case was forwarded by then Pakistan Post Director General Ikhlaq Rana to the Ministry of Communications but it refused to spend public money on this project. Disappointed, Pakistan Post management went on to look for other options.

Subsequently, a foreign bank came on board and agreed to provide a soft loan of $23 million. The payment period was 30 years with a grace period of ten years at a rate of less than one percent which was expected to be converted into a grant.

When this project was approved by Economic Affair Division (EAD), the Communications Ministry turned down the offer from the foreign lender to pave way for the local bank.

An additional director-general, Ijaz Ahmad Minhas, reportedly without prior approval from the director-general, wrote to the competent authority and rejected the loan offer from the foreign lender.

The report further claimed the offer was rejected to pave way for the local bank "for ulterior motives".

Subsequently, on June 3 last year, an agreement was signed between Pakistan Post and the local bank following the publication of an expression of interest in newspapers.

While, for the execution of the project, operational and accounting procedure committees were constituted but a copy of the agreement was not provided.

When the copy was finally presented on the intervention of DG Rana, the authorities found out it was "altered after vetting from Law Division". Observing that the vetted and signed agreements painted different pictures, DG Rana forwarded the matter to the ministry seeking an inquiry into the matter.

The inquiry committee found ADG Minhas "solely responsible for unlawful alterations in the agreement being the sole architect of agreement and spokesman of the department" since he was in direct contact with the bank.

While DG Post Ikhlaq Rana submitted an inquiry report to the ministry, no action was taken against the suspect. The charge-sheet and statement of claims are still pending with the ministry, the report further claimed.

Citing sources, the report said proposals from the National Bank of Pakistan (NBP) and National Information Technology Board (NITB) to meet the Financial Action Task Force (FATF) requirements were also turned down by the ministry to favour the bank.

The report further claimed the contract for the project was awarded in violation of Public Procurement Regulatory Authority (PPRA) rules and other relevant regulations governing the award of government contracts.