WAPDA audit irregularities

An audit conducted by the Auditor General of Pakistan (AGP) has uncovered Rs7.02 billion in financial irregularities in the Ministry of Water Resources and its affiliated organizations, including the Water and Power Development Authority (WAPDA), during the financial year 2024-25. The findings have renewed concerns over the management of delayed and over-budget public sector development projects, particularly major water and hydropower schemes that are considered vital to Pakistan’s energy and water security. Audit Reviews Rs554 Billion in Transactions The audit examined the financial affairs of 112 formations under the Ministry of Water Resources. During the review period, auditors scrutinized Rs359.6 billion in expenditure and Rs194.2 billion in receipts, representing a total financial review of more than Rs553 billion. Despite identifying irregularities amounting to Rs7.02 billion, the audit noted that only Rs2.821 million had been recovered and verified between January and December, indicating limited progress in addressing the financial issues highlighted by auditors. The report stated that the low recovery rate reflected weaknesses in accountability mechanisms and follow-up action. Financial Management Emerges as Biggest Concern The WAPDA Audit Irregularities report revealed that financial management accounted for the largest number of audit observations. Auditors recorded 24 separate cases involving delayed construction of powerhouses, electricity generation losses, unrecovered receivables and the failure to establish dedicated bank accounts for retention money. The report warned that such weaknesses increase financial risks and may result in unnecessary losses to the national exchequer. It also noted that repeated financial irregularities raised concerns about the effectiveness of internal audit systems operating within both the Ministry of Water Resources and WAPDA. Contract Management Problems Highlighted Contract administration was identified as another major area of concern. The audit documented 18 cases related to poor contract management practices. Among the issues highlighted were projects initiated without proper feasibility studies or detailed engineering designs, excessive use of variation orders beyond original contract values and project scope changes that lacked the required approvals. According to the auditors, these shortcomings contributed to project delays, cost escalations and inefficient use of public funds. They stressed that stronger planning and oversight mechanisms are essential before launching large-scale infrastructure projects. Procurement Rules Violated The report also identified several violations of procurement regulations. Auditors recorded four procurement-related cases involving departures from the Public Procurement Regulatory Authority (PPRA) rules and Pakistan Engineering Council (PEC) guidelines. The violations included non-compliance with standard bidding procedures as well as excess and overpayments made to contractors. The audit recommended strict enforcement of procurement laws to improve transparency and prevent financial losses in future government projects. Human Resource and Asset Management Issues The audit further highlighted weaknesses in human resource management. Five cases involved employee-related issues, including recruitment processes lacking transparency and payments of unauthorized or non-compliant allowances. Asset management also emerged as a concern. Auditors identified four cases involving weak monitoring of government land and buildings, unresolved property disputes and poor inventory management. The report emphasized that stronger controls are required to safeguard public assets and prevent misuse or encroachments. Project Planning Failures Led to Delays Poor planning was another recurring issue identified during the audit. The report documented four cases where unrealistic surveys, inadequate planning and weak project execution resulted in significant cost overruns and delays. In addition, auditors reported three operational weaknesses affecting civil, electrical and mechanical works. The findings indicate that deficiencies at the planning stage continued to affect project implementation throughout the execution phase. Recovery Ordered From Contractors The Departmental Accounts Committee (DAC) has directed the management of the concerned organizations to immediately recover and adjust Rs1.339 billion from defaulting contractors. The committee also instructed officials to strengthen financial controls and ensure that future contracts comply with applicable rules and regulations. The audit noted that timely recoveries are essential to minimize losses to the public treasury. Major Hydropower Projects Behind Schedule The WAPDA Audit Irregularities report also expressed concern over the slow pace of work on several strategic water and hydropower projects. Among the projects highlighted were the Diamer-Bhasha Dam, Dasu Hydropower Project, and Mohmand Dam. The audit revealed that the Dasu Hydropower Project had achieved only 26.08% physical progress, compared with the planned target of 70.60% by the end of the review period. The slower-than-expected progress raises concerns over future project timelines, additional financing requirements and the timely completion of key infrastructure needed to address Pakistan’s growing energy demand. AGP Recommends Stronger Oversight The Auditor General has advised the Principal Accounting Officer to establish a strict monitoring system for all ongoing projects. The report recommends closer supervision of project timelines, strict enforcement of procurement regulations, improved contract management and faster resolution of land acquisition and legal disputes affecting project execution. The audit also called for stronger internal audit mechanisms to detect financial irregularities at an earlier stage and reduce the risk of losses to public funds. The findings underscore the importance of improving governance, financial discipline and project management across the Ministry of Water Resources and WAPDA as Pakistan continues to invest heavily in critical water and energy infrastructure.