Audit flags over Rs7 billion irregularities in Water Resources Ministry and WAPDA

The stock of delayed and over-budget public sector projects has come under fresh scrutiny after an Auditor General of Pakistan audit found financial irregularities of Rs7.02 billion in the Ministry of Water Resources and its entities, including the Water and Power Development Authority (WAPDA), during FY2024-25.

The audit covered 112 formations of the ministry, reviewing expenditure of Rs359.6 billion and receipts of Rs194.2 billion during the year.

According to the audit report, only Rs2.821 million was recovered and verified between January and December against the irregularities identified by auditors.

The audit pointed to weaknesses in financial management, procurement, contract handling, asset control and project planning across multiple formations. It said repeated irregularities raised questions over the effectiveness of internal audit mechanisms at the Ministry of Water Resources and WAPDA.

The largest number of audit observations related to financial management, with 24 cases involving delayed construction of powerhouses, generation losses, unrecovered receivables and failure to open dedicated bank accounts for retention money.

Contract management accounted for 18 cases, including projects launched without proper feasibility studies or detailed designs, excessive reliance on variation orders beyond original contract values and unapproved changes in project scope.

The report also identified five cases involving human resource and employee-related lapses, including lack of transparency in recruitment and unauthorised or non-compliant allowance payments.

Procurement violations were noted in four cases, involving deviations from Public Procurement Regulatory Authority rules and Pakistan Engineering Council guidelines, including non-compliance with standard bidding procedures and excess or overpayments to contractors.

Another four cases related to asset management, including weak oversight of land and building encroachments, unresolved property disputes and poor inventory management.

Project planning failures were also reported in four cases, with auditors noting cost and time overruns caused by unrealistic surveys and poor execution planning.

The audit further identified three cases of operational weaknesses in civil and electrical and mechanical works.

The Departmental Accounts Committee has directed management to immediately recover and adjust Rs1.339 billion from defaulting contractors.

The audit also flagged slow progress on major water and hydropower projects, including Diamer Basha Dam, Dasu Hydropower Project and Mohmand Dam. It noted that the Dasu Hydropower Project had achieved only 26.08% progress against a planned target of 70.60% by the end of the review period.

The Principal Accounting Officer has been advised to establish a strict monitoring mechanism for project timelines, enforce procurement rules and resolve land and litigation issues to prevent further losses to public funds.