ISLAMABAD - Difference between findings of two inquiry teams on Retail Automation and Zaqsoft-PSO contracts have put the Pakistan State Oil management in hot waters before the subcommittee of National Assemblys Standing Committee on Petroleum and Natural Resources, as one team has levelled corruption charges in deal whereas the other team has given a clean-chit. The NA body that met in chair with Nawab Ali Wassan to examine the inquiry report and help PSO recover the amount from the management of Zaqsoft has raised serious concerns and reservations over the report of PSO fact-finding team and termed it a 'lollipop. The PSO fact-finding team Friday submitted a report to the subcommittee of NA body and prayed for withdrawal of Inquiry Report 2009 prepared by Re-Evaluation Committee chaired by Tarik Akbar Khan that had established a financial loss of Rs 781.4 million to the PSO due to malafide intention in the contract. However, head of the fact-finding team Muneer Ismail while briefing the NA body accepted that contract was awarded without advertisement. The fact-finding teams report identified all the vendors available at that time locally and globally and limitations attached to them. Equal opportunity was provided to all three available vendors to set up a pilot project and the work was awarded after the successful demonstration of the pilot project by Zagsoft. This fact-finding team further finds a deviation from the conventional procurement process. However, it also finds that efforts were made to have alternate controls and mitigations in place. Decision-making was done through a management committee and all short-listed vendors were evidently given an opportunity to deploy and execute a pilot project as a proof of concept. According to the fact-finding team, Financial Loss to PSO quantified/assessed at Rs 781 million to be conceptually incorrect for the following reasons: The total actual outlay of the program to Zaqsoft including Capital and Maintenance is Rs. 523 Mn. and not Rs. 781 Million as stated incorrectly in the Committees Report. This incorrect number includes Duplication or Overlap of Entries (Loss to various favors Rs. 118 Million, Investment waste Rs. 108 Million, Maintenance Cost waste Ps. 43 Million.) The Fact-Finding Team further finds that prices were abnormally high in Parts quoted by Zaqsoft to P50. After the 1st Agreement, these Parts Rates were further escalated by 29%. However, this was not raised as a concern in the Committees Report (2009). According to the Zaqsoft Agreement, there were two types of Payments to Zaqsoft. One was for the cost to the Pump Controller, which mainly comprised of the Hardware Cost and the second one being the System Maintenance part. In our review of financial record, no Security Deposit was deducted from the payment as it was not required under the terms of the Agreement which may be on the Rationale that the System was available at our Sites and the Payment is only made once the System is delivered to P50. According to the Agreement, the second type of Payment, i.e. the Payment of Maintenance was subject to the deduction of security deposit from the running bills, which were returned after completion of the appropriate duration. It is relevant to mention here that the Fact-finding Team finds the assertion that No Security Deposit was deducted, but it cannot establish a deviation from the Agreement with regard to the Part Payments. The Report does not account for the Recovery for the capital outlay through the 'Service Station License Fee (SSLF) Recovery Mechanism, where PSO has recovered Rs. 84 Million till 2005 - 2010 and continues to recover an Additional Rs. 21 Million annually. This Report also does not quantify the Volume and Earning to PSO due to the competitively strong card offering as over the 8 years, the Net Earnings on fuel alone have been in the range of Rs. 906 Million. Furthermore, the analysis of the report does not account for the service charges earned by PSO from its customers through the cards business generating Rs 632 million. When the above are reconciled for the net effect, the figure is very significantly positive & cannot be characterised as a loss.