World Bank unearths massive financial fraud in Pakistan
The World Bank has unearthed a racket of 23 Pakistan companies adopting corrupt, fraudulent, collusive and coercive practices to win contracts for projects undertaken by the Distribution Companies (DISCOS) and National Transmission and Dispatch Company (NTDC).
The World Bank has unearthed a racket of 23 Pakistan companies adopting corrupt, fraudulent, collusive and coercive practices to win contracts for projects undertaken by the Distribution Companies (DISCOS) and National Transmission and Dispatch Company (NTDC). According to the report prepared by the World Bank Group (WBG) integrity Vice Presidency (INT), these companies had organized themselves into "cartels" for mutual benefit.
The WB International Bank for Reconstruction and Development (IBRD) had entered into a loan agreement with the Government of Pakistan (GoP) in July 2008 as part of the Electricity Distribution and Transmission Improvement Project. The project's objective was to strengthen the capacity of distribution and transmission networks in Pakistan to meet the increasing electricity demand in selected areas while strengthening the institutional capacity of certain distribution companies and supporting other priority areas of power sector reform.
The financing of the project was supplemented by two International Development Association (IDA) credits. The Project was closed in February 2014. The INT's administrative inquiry focused on six Project-financed contracts to supply electricity transmission equipment. It was revealed that for years, the public procurement market in Pakistan for certain kinds of electricity transmission, equipment was controlled by a group of companies which has been referred to as members of the cartel in the report.
These companies manipulated the market in advance to ensure that only some preferred companies won contracts, including the World Bank-financed ones. The companies thus collaborated on bid prices. Financial scams are a common phenomenon in Pakistan. A fragile regulatory framework, a subverted judicial system and connivance of law enforcement authorities embolden unscrupulous people/entities to loot the exchequers money to satiate their own greed.
The above revelations clearly warrant immediate scrutiny of Pak entities/businesses that have signed financial agreements with international funding organizations such financial frauds not only incur heavy losses for the exchequer of the country, but also defeat the entire purpose of international funding that is meant for overall and equitable development. Though the World Bank has imposed an administrative sanction of debarment of any legal entity that these companies directly or indirectly control, it should be wary while approving any future funding of projects in the scam prone country of Pakistan. (ANI)
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)