SC orders forensic audit of NSUSC via external firm

Takes serious notice of mismanagement and irregularities in the company’s affairs

The Supreme Court took serious notice on Thursday of mismanagement and irregularities in the affairs of the North Sindh Urban Services Corporation (NSUSC), a company financed by the Asian Development Bank (ADB) for water supply and solid waste management of eight cities of the province, and ordered its forensic audit through an external firm.

Hearing a petition seeking provision of potable water and safe environment to the citizens of Sindh, the court’s three-member bench headed by Justice Amir Hani Muslim observed that schemes of more than $200 million had been executed through the NSUSC despite the fact that the company was running without a managing director or an internal auditor for the past couple of years.

The SC said that based on the first impression, the affairs of the NSUSC presented a picture of abuse of powers and misuse in utilisation of funds, as it failed to fulfil the mandate it was given by the provincial government, adding that the matter should be referred to the National Accountability Bureau for an inquiry.

The court said the government was least bothered to conduct an audit of the company, which was financed by the ADB and the loan needed to be repaid with the taxpayers’ money.

The bench asked why politicians were members of the NSUSC’s board as well as why the company was operating without a managing director or an internal auditor for the past two years. It said the entire water supply and sewerage system of the province had been destroyed and the people were dying due to consumption of contaminated water.

The SC also took exception to the conduct of the Sukkur mayor, who was also a member of the board and wished that the NSUSC’s projects would continue. It said the people’s lives had been compromised for the sake of the schemes and the court would not allow disbursement of funds through the company that had failed to deliver.

Sindh Chief Secretary Rizwan Memon told the court that the government was willing to transfer the functions of the NSUSC to the local municipal bodies as the company had failed to perform its duties and that they were prepared to wrap up the firm.

Memon said jobs provided by the NSUSC without the government’s consent would not be regularised, but he requested the court to allow completion of two schemes already initiated by the company: a water supply scheme in Sukkur, and the purchase of solid waste equipment and machinery through the existing mode under the supervision of the public health department.

He told the court that a meeting with ADB officials was held to discuss the fate of the projects and that the bank’s representatives had said the contract could be continued only if the projects were executed by the NSUSC.

NSUSC acting managing director Mehmood Abbas Rizvi said payment of projects to the contractors was to be made directly by the ADB after verification by the company.

Rizvi said the NSUSC had 835 employees, of which 101 were on contractual basis while the rest were daily wagers, adding that the company was executing three ongoing projects: $5.8 million water plants in Sukkur, $5.2 million purchase of solid waste machinery and equipment, and $2.4 million project for consultant to design a sewerage project.

He said that some projects as regards supply of water schemes in Khairpur and installation of generators and water pumps were completed in the first tranche of the multi-tranche financing facility.

Former NSUSC internal auditor Amjad Hussain Durrani also levelled serious allegations with regard to financial affairs of the company and said he was removed from the post for not complying with the illegal demands of the then MD.

The SC said the NSUSC had wasted the public’s money and mismanaged the finances entrusted to it, failing to maintain the system of providing potable water and proper sanitation, which was a criminal negligence on the part of the company, as already mentioned by the judicial commission in its report.

The bench directed the chief secretary to submit a concise statement in court regarding the fate of the NSUSC by Friday (today), and ordered conducting a forensic audit of the company through AF Ferguson, which shall audit the entire amount received either through the ADB or the provincial government or any other mode and submit the report to the judicial commission and the court within two months.

The court directed the acting MD of the NSUSC to submit all the details of the company accounts, employees as well as the minutes of the latest meeting of the board of directors.

CS Memon also filed reports regarding forming a committee and task force to mitigate pollution and discharge of effluent and waste in Manchar Lake and monitoring the water supply schemes and filtration plants.

The court directed the irrigation secretary to take samples of water from the lake and other water schemes and maintain the record on a weekly or monthly basis.