ISLAMABAD (June 03 2009): The sub-committee of Public Accounts Committee (PAC) was stunned to know that National Telecommunication Corporation (NTC) had awarded contracts to two unlicensed companies, while Pakistan Telecommunication Authority (PTA) did not bother to go into lengthy details of violation made by the corporation.
The audit authorities told the PAC sub-committee here on Tuesday, chaired by MNA, Khawaja Asif to take up the special report on the accounts of NTC for the period 2001-06, which points towards plethora of misappropriations and non-adjustment of Rs 1.5 billion by the gateway contractors.
The committee expressed dismay over the performance of PTA and directed the NTC to arrange a briefing for the PAC sub-committee on June 08. "We can not settle the paras unless the public money is not recovered. The PAC is eager to know on what ground it has not taken any action against NTC", Asif remarked.
Section 20 of PTA act, 1996 says that no person shall establish, maintain or operate any telecommunication system/service unless he has obtained a license and no licensee shall establish maintain or operate any telecommunication system, which is not authorised under the license.
In sheer violation of the PTA rules NTC entered into contract agreement on October 2000 with CATCOM for establishing international gateway exchanges, pre-paid calling card service, pay phone system and call centres etc. In another case, the corporation did the same in the contract agreement with M/s CATCOM and M/s ZAHRA on April 2002, again clearly ignoring the PTA rules.
The audit reports further revealed that the corporation also did not clarify media secrecy arrangements prior to the 2002 commissioning of international connectivity by M/s CATCOM, which was found involved in a case of illegal termination of international traffic in September 2001.
The report said trade debt of the corporation increased by 173 percent, from Rs 586.97 million in 2001-02 to Rs 1.60 billion in 2005-06. The audit officials also highlighted a non-transparent award of contracts. They said that the NTC had been set up to provide telecommunication services only to designated customers within Pakistan, in an effort to segregate government and defence telecommunication networks to ensure their communication security after the privatisation of the PTCL.
But the NTC and its gateway contractors did not implement the agreed security measures. Audit authorities told the PAC the NTC management invested Rs 3.37 billion of working capital and surplus of receipts in 15 private commercial or foreign banks as six-month short-term deposits during 2004-05 and 2005-06, in violation of the rules to grease their palms with profit earned on the deposit.
They told the sub committee that in view of these malpractice's, the special audit of NTC was carried out on the request of the Ministry of Information Technology during 2006-07. It said that the DAC was held in February 2007 wherein audit observations were discussed and report was finalised/approved in April 2007.
The report contains five issues ie organisation and administrative structure, NTC's financial status, international gateway operation, investments and enterprise resource planning.
The PAC was told that the organisation and administrative structure of NTC highlights the weakness in the constitution of NTC management board and notification/exercise of financial powers/without approval of the finance division. The special audit report said that the contract for enterprise resource planning was awarded without approval by the DWP. The expenditure of Rs 6.682 million had been wasted.
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