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Bangladesh loses $9.65m in misdeeds at govt firms
Publication Date : 11-01-2013
Bangladesh lost 458.4 million taka (US$5.74 million) in 2008 when state-run Triple Super Phosphate Complex Ltd imported a huge amount of unusable rock phosphate with a faulty certification from a pre-shipment inspection company.
News of the irregularities surfaced after the Office of the Comptroller and Auditor General (OCAG) conducted an audit inspection in 2010 into 21 state-run companies controlled by the industries ministry.
Together, the 21 companies cost the country more than 768.7 million taka between 1988 and 2010, through non-compliance of government rules, a lack of internal control and failure to follow the rules of agreements.
The disclosure comes after the OCAG last month raised 605 objections over 22 ministries' spending amounting to 48.11 billion taka.
Triple Super awarded the contract to supply 16,500 tonnes of rock phosphate—used for fertiliser, animal feed supplements and industrial chemicals—to the lowest bidder, Dubai-based Trade Line, in September 2008.
Documents show that National Marine Consultants Bangladesh issued a PSI certificate in January 2009 after assessing the quality and quantity of the chemical.
Triple Super, an enterprise of Bangladesh Chemical Industries Corporation (BCIC), cleared the full dues against the letters of credit in favour of the Dubai-based company -- without verifying whether the appropriate authorities have issued certificate of origin.
While offloading the consignment at the Chittagong Port, Triple Super learnt that the quality of the imported nondetrital sedimentary rock did not match its requirements: the particle size was not right and its humidity was also higher.
Triple Super immediately informed the BCIC through fax, but the corporation under the industries ministry never responded.
As the local authorities did not object, the unusable substance was unloaded in February 2009.
Later, a joint laboratory test found that the vital parameters of the imported substance did not even match the certification made by the PSI agent.
But Triple Super neither raised any claim against the agent who gave the wrong certification nor against the supplier of the substance, as a result of which the company lost 458.4 million taka.
That episode was not the only spot of misdeed Triple Super was involved in.
Records show that in December 2004 Triple Super used 1,181 tonnes of rock sulphur to produce sulphuric acid, a component for fertiliser manufacturing.
It turns out the company did not produce the mineral acid that month, while costing the country another 7.43 million taka.
In 2010, the company bought polythene pallet at higher prices, even though Desh Trading Corporation, the lone bidder, twice offered lower prices.
The irregularity cost the company 1.86 million taka, said the audit report.
In the same year, Triple Super along with Natural Gas Fertiliser Factory Ltd in Fenchuganj, Jamuna Fertiliser Company in Jamalpur and BSIC head office cost the government 19.4 million taka for overtime payment, a direct breach of labour laws.
The BCIC itself was involved in an anomaly of 61.9 million taka, said the audit watchdog.
The audit found that the corporation billed the government to distribute fertiliser across the country, although those expenditures were already covered in the office's budget.
The Patenga-based General Electric Manufacturing Company Ltd cost the country 19.5 million taka in 2008-09 and 2009-10 as superfluous commission, said the audit report.
The power, energy and mineral resources ministry instructed distributors to procure electric equipment from the state-run manufacturer.
And records show that Power Development Board, Dhaka Power Distribution Company, Dhaka Electric Company and Rural Electrification Board did purchase transformers and electric equipment directly from General Electric Manufacturing Company.
But the company appointed MS Enterprise Ltd and Saurav Enterprise as sales agent nevertheless and as a result, it had to pay the sum as commission.
Going forward, the audit report recommended the authorities stop appointing sales commission agent.
Some corrupt officials at Zeal Bangla Sugar Mills in Jamalpur misappropriated 1.61 million taka in 2008-10 by extending loans on forged documents.
Shampur Sugar Mills Ltd in Rangpur could not realise the 1.059 million taka it lent to sugarcane farmers by breaching credit disbursement policy.
Faridpur Sugar Mills cost 20.6 million taka as interest on outstanding loans to Krishi Bank between 2002 and 2010, a situation which could have been averted had it sold the stored sugar and molasses for the purpose of servicing the loan.
Karnaphuli Paper Mills in Rangamati incurred a loss of 4.47 million taka in 2007-09 after it bought pulp at higher prices from the same supplier -- who had earlier offered lower prices.
*US$1= 79.79 taka