ISLAMABAD - After perusing the ‘eye-opening’ audit report, the Supreme Court on Thursday directed the National Accountability Bureau to proceed against nuclear scientist Dr Samar Mubarakmand for his alleged failure in completing the Underground Coal Gasification project in Thar district of Sindh despite spending billions of rupees.

The top court also observed that it was for the federal government to decide if it intended to carry out the project.

Chief Justice Mian Saqib Nisar heading a 3-judge bench observed that Dr Mubarak was responsible for the failure. The bench which was hearing the case regarding UCG project, known as Thar Coal project, also lamented that no progress in the project had been made despite spending around Rs5 billion.

“He was over ambitious and wasted Rs5 billion of government in one project. Dr Mubarak conceived that this project will complete the demand of electricity as well as gas in the country but despite Rs4.69 billion the electricity is not generated,” observed the chief justice. 

Justice Faisal Arab, member of the bench, questioning if the project was practically ended then why the amount from the account of the project was taken.

Additional Attorney General Sajid Ilyas Bhatti told the bench that the amount was released on directions of Dr Mubarak.

There were 3 schemes in Thar Coal project including creation of new processing facilities for production of coal gas by UCG, creation of new processing facilities for handling and purification of coal gas produced by UCG and 2 X 50 MW Power Project from Syngas. Initially in 2009 and 2010, the cost of PC-I of 3 schemes was over Rs9.88 billion while over Rs4.69 million was released and Rs4.69 billion was the expenditure.

According to PC-I, the total estimated reserves at Thar are 175.5 billion tonnes of lignite coal, which are second largest in the world spread over 9000 square kilometres.

Audit report revealed that the financial releases in the project were irregular which led to the disruption in project operations.

“Ill-planned execution and poor monitoring by governing body/energy department, government of Sindh, further impeded operational activities. Despite spending more than Rs4 billion, the project has not been able to deliver as per PC-I objectives.”

The report stated that over ambitious targets as stated in PC-I were not revised to attainable position and due to financial indiscipline, several deviations in PC-I were noticed, adding that the project management was not able to meet the deadlines as set out in PC-I of project.

“The situation further aggravated when the project authorities failed to satisfy the technical appraisal committee during its visit in May 2012 regarding successful end-to-end cycle production. This created doubts regarding viability of the project.”

The audit team, constituted by Auditor General of Pakistan on direction of the top court, conducted the audit of Underground Coal Gasification project at Thar for the financial years 2009-10 to 2017-18.

The main objective was to critically review the project activities which include operational, financial and human resource over the period of last 9 years.  The audit was conducted at project site at Islamkot and Coal & Energy department Government of Sindh.

The audit report stated that UCG project had totally been shut down and the employees had not been paid the salaries since July 2018.

“There was no one at the project site to look after and safeguard the project assets i.e. machinery, equipment, vehicles etc. Though Sindh government was directed to take over the project, make adequate arrangements to secure the assets and prepare the inventory of all assets but no headway was observed on these three counts.”

The finding of the report stated that due to ill planning, UCG project had to face several issues during its execution.

Due to non-preparation of feasibility study, it was unclear whether the UCG was a commercially-viable project. Absence of environmental impact assessment study prior to initiation of the project was always going to be an issue.

“Planning Commission and Sindh government did not play their due role in successful implementation of the project. Procurement of machinery and equipment remained big problem throughout execution.”

Owing to absence of technical consultancy, project was never going to be completed on time. As regards cost-benefit ratio, stream of benefits could not accrue as project could not be made operational. The project management could not even generate enough power to run its own plant and provide electricity to its residential colony.

“It is high time that the concerned authorities take critical decision regarding future of the project. A detailed technical may be carried out by Third party regarding sustainability of project and based on the recommendations of that Committee future of the project may be decided,” the audit stated.

The report also mentioned unauthorised drawl of funds from Assignment Account to DDO bank account. “The scrutiny of assignment account revealed that project management had further opened two DDO accounts with National Bank of Pakistan for utilization/disbursement of funds. The balances maintained at the close of financial years show that the funds drawn were not meant for immediate disbursement and were just drawn to avoid lapse of funds.”

During the audit, it is observed that an expenditure of Rs135.41 million was incurred on account of establishment of new gasifier field of 30 wells.

The expenditure was incurred in total disregard to minutes of the meeting and there was no provision of another gasifier in PC-I or work plan schedule. New gasifier was developed without operationalizing the already-existing 36 wells against which an amount of Rs171.6 million was already spent.

Procurement of compressors over and above the provision of PC-I costing Rs252.5 million, purchase of diesel generators without PC-I provision costing Rs81.2 million, non-transparency in recruitment of contract employees, unjustified payment of other allowances costing Rs205.4 million, expenditure incurred in violation of SPPRA Rules causing loss of Rs1736.3 million, irregular award of tenders for supply of machinery and equipment causing loss of Rs1309.4 million, irregular expenditure of purchase of Syngas generators causing loss of Rs660.9 million, irregular purchase of mechanical workshop equipment causing loss of Rs15.89 million, unjustified acceptance of bid for purchase of Syngas generators causing loss of $2.65 million, irregular expenditure on purchase of HDDR machine causing loss of $2.51 million, irregular purchase of pipes and valves causing loss of Rs50.26 million, wastage of government fund to the tune of Rs171.6 million, non-transparent payments to the tune of Rs213 million had also been discussed in the audit report beside other irregularities.

The audit recommended that the project must be deliberated thoroughly before approval of PC-I and feasibility study must be ensured in highly complex and technical projects before approval of PC-I while Environmental Impact Assessment study must be conducted by the EPA to assess significant risks to the environment.

“Proper monitoring of project execution should be ensured for achievement of intended objectives. Provisions regarding bid security, performance guarantee and integrity pact with the contractors should be enforced to safeguard government interest.”

“No subsidiary bank account should be opened in addition to the assignment account. Transparency in recruitment of project employees should be ensured,” it is further recommended.