Two officials booked in Karachi over Yellow Line BRT Rs8.5bn advance payment

KARACHI: Two bureaucrats have been booked in Karachi in connection with an Rs8.5 billion advance payment made to contractors working on the Yellow Line bus rapid transit project, in a case centred on alleged misuse of authority and financial irregularities.

According to a first information report registered by the Anti-Corruption Establishment (ACE), the accused include former Karachi Mobility Project project director Zameer Abbasi and former director procurement Jhaman Das, along with others. The FIR was lodged on behalf of the state by ACE District South Inspector Mohammed Sher Zaman Awan.

The case has been registered under Sections 34, 409, 420, 467, 468, 471 and 477-A of the Pakistan Penal Code, read with Section 5(2) of the Prevention of Corruption Act, 1947. The allegations include criminal breach of trust, cheating, forgery, use of forged documents and falsification of accounts.

Inquiry into Yellow Line contracts

The FIR stems from an inquiry carried out by the Chief Minister’s Inspection, Enquiries and Implementation Team Department into alleged financial mismanagement in the Karachi Mobility Project for the Yellow Line, which is being executed with World Bank assistance.

The inquiry examined three construction contracts in particular: New Jam Sadiq Bridge, Depot-I at Dawood Chowrangi and Depot-II at Indus Hospital. The Yellow Line is planned to run between Dawood Chowrangi in Quaidabad and Numaish, and is intended to operate exclusively with electric buses.

In the FIR, investigators alleged that the project suffered from serious administrative and financial failures that caused losses to the Sindh government. The document stated that the project’s financial handling reflected severe indiscipline and alleged criminal negligence in collusion with contractors.

Contract violation alleged

Official documents cited in the FIR say the contracts did not contain any clause allowing advance payment or financial assistance to contractors. Instead, the contractors were required to arrange financing from the commercial market.

The FIR states that the Assignment Account facility was grossly misused by the two officials. It further alleges that the Rs8.5bn financial assistance was unsecured and was provided without any bank guarantee, exposing government interests to risk.

The official record also states that the financing cost of Rs1,250 million at 15 per cent amounted to an implicit loss to the government and an undue gain for the contractors. The FIR alleges that Jhaman Das acted in collusion over the financial indiscipline and fraud, while contractors were said to be in league with Zameer Abbasi in obtaining favours.

“The accused persons, in connivance with each other, committed criminal breach of trust, cheating, forgery, preparation of false records, abuse of official position, blatant financial indiscipline, and caused both implicit and explicit losses to the government, resulting in wrongful loss to the public exchequer and wrongful gain to themselves,” the FIR alleged.

The FIR adds that the role of other people associated with the project would be determined during the course of the investigation.