Musharraf Government has done nothing
to recover it
Rs
11 Billion “Just Missing” without Trace
Ahmad Khan
ISLAMABAD: A Japanese loan of $250 million (present value Rs15
bn), given in 1998 for education and health projects under the
Rs 500 billion Social Action Programme (SAP) has mysteriously
disappeared and even the military government has failed to trace
it.
The scam was
unearthed by Auditor General of Pakistan in 2000 when its auditors
reached Federal SAP secretariat to conduct the audit and were
told that this huge amount was never transferred to any SAP account
so there was no question of an audit.
The Chief Executive Secretariat, in the light of the audit report
in 2000, ordered an inquiry into the disappearance of this big
sum in mid 2000 against former PM Nawaz Sharif but nothing came
out and then the Sharifs were flown to Saudi Arabia into exile.
SA Tribune has learnt that the then chief of SAP one, Qizilbash,
was picked up from his office located in F-8 Markaz by Nawaz Sharif’s
son-in-Law Captain Safdar and his political secretary Mushtaq
Tahir Kheli and brought to the PM office. There he was asked to
educate the prime miniter and his Finance Minister Ishaq Dar on
how this money could be diverted to the famous "Qarz Utaro,
Mulk Sunwaro" scheme launched by Sharif.
Qizilbash had explained him the way to gobble down that money.
It never went into any debt repayments not into any government
of State Bank Account.
An official report reveals that till date there is great confusion
about the utilisation of this money as even the Auditor General
of Pakistan has expressed its inability to conduct the audit of
this loan saying not a single penny has so far been allocated
or released to SAP accounts since 1998 by the Finance Ministry/State
Bank of Pakistan as required under the loan agreement. View
Audit Report Page1 | Page2 | Page3
| Page4 | Page5
An insider claimed that the former prime minister Nawaz Sharif
and his finance minister Ishaq Dar actually played a major role
in blocking the transfer of this money from the SBP accounts to
SAP accounts and did not allow its utilisation for the purpose
for which the loan was obtained.
Reportedly, Mr Dar and Nawaz Sharif had utilised this huge money
in the name of "Qarz Utaro Mulk Sanwaro" (Repay debts
for Country’s Prosperity) scheme. Under this scheme, billions
were collected from all over the country from the emotional people
soon after the massive victory of PML in the 1997 elections.
The utilisation of this fund collected from the public remains
a mystery till date as neither this money was used for debt retirement
nor its audit was conducted as required under the law with regard
to use of public funds.
Some senior officials of the finance ministry and those associated
with the SAP were believed to be hand in glove with the former
rulers in depriving the nation of the fruits of this loan sought
for the execution of primary health and education projects.
This
huge fraud surfaced recently when the Japan government asked Islamabad
to provide it the audit reports of the nine projects that were
to be financed from this loan besides its evolutionary report
as agreed to at the time of signing of this grant.
Consequently,
Auditor General of Pakistan was asked to conduct the audit but
it expressed its inability to do so saying "since no fund
has been allocated to SAP, the auditors can not do this job".
According to available information, in March 1998, an agreement
was signed for the Loan No PK-C between the Overseas Economic
Cooperation Fund (OCEF) and the President of the Pakistan, Farooq
Leghari.
The government of Japan provided an amount of Yen 32,032 million
equivalent to $250 million on 27.3.98 in lump sum as a soft loan.
At that time the total in Pak rupees came to Rs 11 billion.
The purpose of the loan was to support a program of action, objectives
and policies designed to achieve structural adjustment of the
banking sector adjustment loan BSAL extended by the World Bank.
The Government of Pakistan was required to deposit the equivalent
in Pak rupees of amount of Japanese Yen disbursed by the OCEF
in the bank account titled "Counterpart Fund Account"
with the SBP.
Accordingly, a counterpart fund account was opened in the blocked
account on 27.3.1998 and an amount of Rs10.92 million was deposited
therein by the Government as the total amount of Rs 11 billion
was not available.
According to the agreement with the Donors, at federal level three
programs were to be implemented “National Programme for
Family planning and primary health care; Expanded Program for
Immunisation EPI and Aids Control Program.
In Punjab, upgradation of 2000 primary schools to elementary level,
consolidation/ strengthening of 5000 primary and mosque schools
and sewerage/ drainage treatment facilities for rural areas of
Punjab were to be provided.
In Sindh Mithi, Nuakot Diplo Ajoining village water supply schemes
(total 143) and in Balochistan consolidated and improvement of
middle level education projects were to be executed.
Rs 4.1billion were to be given to the provinces in 1998-99 and
Rs 6.9bilion in 1999-2000 to the provincial governments for the
execution of these projects.
The record and account of expenditure financed out of the proceeds
of the loan was required to be maintained as agreed under the
agreement.
The audit of the record account was required to be conducted annually
by AGP in accordance with appropriate auditing practices consistently
applied. And certified copies of the audit report was required
to be submitted to the Fund not later than nine months after the
end of each financial year. The loan was to be utilised by March
27, 2000.
But the AGP disclosed the entire amount of loan and the deposit
in counterpart fund account was never transferred to the federal
consolidated fund account, which is violation of article 78 of
the Constitution.
The AGP said the government was required to deposit Rs15 bn but
only Rs10.9 million was deposited. The details of neither the
deposit in the counterpart fund not the expenditure financed out
of it was available, the AGP observed.
Even basic documents of projects to be financed out of this fund,
approval of the competent authority and OCEF, technical section,
allocation and releases of funds are not available with the federal
SAP secretariat and so have not been produced before the audit.
The sad part is that the Musharraf Government has also accepted
quietly that Rs 11 billion were missing and nothing could be done
about it.
