Ctg port’s anomalies cost govt Tk 258 crore

The state coffers were robbed of Tk 258 crore for 26 counts of irregularities by the Chattogram Port Authority between fiscal 2017-18 and 2019-20, found the Comptroller and Auditor General (CAG).

The irregularities include violations of Public Procurement Rules 2008, Income Tax Ordinance 1984, National Board of Revenue's order and statutory regulatory order, Chittagong Port Ordinance 1976 and Central Public Works codes and breach of contract terms.

For each of the irregularities, the CAG sought explanation from the CPA chairman and the shipping secretary but got no answer, said the report, which was presented at the parliament in June last year.

CPA Chairman Mohammad Shahjahan, however, refuted the allegation.

"We gave answers to each of the enquiries made by the CAG. It is the CAG's duty to raise objection while our duty is to give explanation to those objections and we did that," he told The Daily Star.

There was no financial irregularity on their end and everything was done following the rules, he said, while drawing attention to an irregularity mentioned in the CAG report over the procurement of a tug boat.

CPA signed an agreement with New Western Marine Ship Builders for the procurement of a high-power tug boat for Tk 37.75 crore, Tk 3 crore more than the shipping ministry's estimated cost of Tk 34.72 crore, the CAG said.

The contractor was supposed to deliver the tug boat by June 2017, but as of May 2020, the tug boat remained undelivered, according to the report.

The shipping ministry asked the CPA to take punitive action against the supplier.

But instead of taking any action against the contractor like cancelling the contract or confiscating performance security or blacklisting it, the port authority continued to pay the contractor in violation of the Particular Condition of Contract.

As of December 8, 2020, a total of Tk 23.09 crore was paid to the contractor, the CAG said in the report.

The tug boat was completed on December 2021 and delivered in the first week of January 2022, Sohail Hasan, managing director of New Western Marine Ship Builders, told The Daily Star.

In the same month, the tug boat was launched by Shipping Minister Khalid Mahmud Chowdhury.

"As Western Marine was taking so much time to deliver the boat, I personally took the initiative as per the direction of the ministry."

CPA is yet to pay Tk 7 crore to the contractor for the boat, Shahjahan said.

"But we are using the boat for several months now and earning money off it. Am I making a loss or profit for the government by doing this? We did not pay a single penny anywhere violating any rule," he added.

There was also a loss of Tk 87.45 crore for non-recovery of the port authority's share of sales proceeds of auctioned goods by the Chattogram Custom authority between fiscal 2017-18 and fiscal 2019-20, the audit found.

In another case, CPA's marine department on June 25, 2018 signed a deal with Chittagong Dry Dock Limited for docking and repairing MT Kandari-1 for Tk 12.68 crore.

The work order was issued on the same day and no timeline was mentioned for the completion of the works. The contractor submitted a bill three days later showing that the work was completed, and CPA made the full payment on July 11, 2018.

"It is not possible to complete a work involving such a huge amount of money in just three days," the CAG said in the report.

Noticing defects in the vessel, its engine driver sought repair on August 2, 2018. "This proves that the ship was not repaired as per the terms of the contract before."

The contractor refused to do further repairs even though the defects were observed within the contractor's defect liability period, the report said.

The state coffers were also deprived of Tk 32.27 crore after CPA's accounts and finance department deducted income tax from the bill of berth operators at a rate prescribed by the National Board of Revenue from fiscals 2017-18 to 2019-20, the CAG found.

Another Tk 30 crore was lost for CPA's estate department's failure to collect rent from companies for CPA's properties leased out.

Despite not achieving the set targets, the port authority gave Tk 29.27 crore as incentive bonus among its officers and staff in fiscal 2019-20.

This was counted as an irregularity by the CAG, which has called for collecting the amount given out in incentive bonus back from the officers and employees.

There was a financial loss of Tk 10.9 crore for CPA's rental of cars and microbuses overshooting the ceiling set by the finance ministry for such expenses, the report said.

Subsequently, CAG called for recovery of the disputed amount.

The port also suffered a financial loss of Tk 50 lakh as several officials and staff received the amount showing expenses during foreign tours without submitting any reconciliation bills and vouchers even after accepting airfares and all other allowances.