KARACHI: Two bureaucrats have been booked over an advance payment of Rs8.5 billion to contractors of the Yellow Line BRT project in an alleged case of misuse of authority, it emerged on Monday.

The Yellow Line is planned to connect Quaidabad’s Dawood Chowrangi with Numaish and will exclusively use electric buses to ensure it remains environmentally friendly.

The advance payment, which caused significant financial losses to the Sindh government, violated the contract, as the contractors were required to arrange financing from the commercial market.

The Anti-Corruption Establishment (ACE) has registered a first information report (FIR) against the then project director (PD) of the Karachi Mobility Project (KMP), Zameer Abbasi, its then director of procurement, Jhaman Das, and others on behalf of the state. The FIR was lodged by Inspector Mohammed Sher Zaman Awan of ACE District South.

The FIR was registered under Sections 34 (acts done by several persons in furtherance of common intention), 409 (criminal breach of trust by a public servant, or by a banker, merchant or agent), 420 (cheating and dishonestly inducing delivery of property), 467 (forgery of valuable security, a will, etc), 468 (forgery for the purpose of cheating), 471 (using as genuine a forged document) and 477-A (falsification of accounts) of the Pakistan Penal Code, read with Section 5(2) of Act II of 1947 (the Prevention of Corruption Act), which pertains to punishment for criminal misconduct.

The case was registered on the basis of an inquiry conducted by the Chief Minister’s Inspection, Enquiries and Implementation Team Department (CMIE&ITD) into alleged financial mismanagement in the Karachi Mobility Project (KMP) for the Yellow Line, which is being implemented with assistance from the World Bank.

The inquiry focused on three construction contracts in particular: the New Jam Sadiq Bridge, Depot-I at Dawood Chowrangi and Depot-II at Indus Hospital.

“The project suffered from gross maladministration, blatant financial indiscipline, and both implicit and explicit losses to the government,” the FIR stated.

Referring to the record and statements, it said that “there is no denying the fact that the project’s financial management is marred with severe indiscipline to the extent of criminal negligence in connivance with the contractors”.

The “financial indiscipline [and] fraud” appeared to be in collusion with Jhaman Das, an employee of the Local Government Department, and the contractors were “in league with Zameer Abbasi in seeking the favours”, as per the official documents.

The FIR further claimed that it had been proven that the Assignment Account facility had been “grossly misused” by the two bureaucrats, which amounted to “corrupt practices, to say the least”.

It was pointed out in the official documents that there was no specific clause in the contracts for advance payment or financial assistance to the contractors.

“The contractors could have arranged financing through the commercial market instead,” the documents said. “It’s a clear contractual violation.”

Additionally, the “financial assistance” of Rs8.5bn was “unsecured and without any bank guarantee, seriously putting government interests in jeopardy”.

“This is a violation of public trust, financial indiscipline and favouring contractors at the cost of government loss.”

The documents further stated that “the financing cost of Rs1,250m (at 15 per cent) is an implicit loss to the government and undue profit to the contractors”.

“The accused persons, in connivance with each other, committed criminal breach of trust, cheating, forgery, preparation of false records, abuse of official position, blatant financial indiscipline, and caused both implicit and explicit losses to the government, resulting in wrongful loss to the public exchequer and wrongful gain to themselves,” the FIR alleged.

It was further stated in the FIR that the role of other persons involved in the project would be determined in due course during the investigation.