Railway spends Tk 300,000 for machinery worth Tk 19,000

The equipment used to lift the wheels of a derailed train or a rail track that has sunken into the ground, is called a ‘lifting jack’.

It takes around Tk 19,000 to import this from India. Yet the railway authorities have brought this equipment from the contractors for Tk 300,000. It has purchased 12 pieces of such equipment.

A total of 16 lifting jacks would have been bought with the money spent by the railway on one single lifting jack. Similarly, a Tk 65,000 drilling machine has been purchased for Tk 965,600.

Each drilling machine has been bought at 15 times higher the market price. It doesn’t end there. A cutting disc has been purchased at 8 times the market price.

The office of the Track Supply Officer (TSO) of the railway’s East Zone (Chattogram) has purchased 28 items of machinery at such abnormally inflated prices. The actual market cost of these items of machinery is Tk 1.85 million (Tk 18.5 lakh). Yet Tk 20 million (Tk 2 crore) has been spent on these purchases.

These items of equipment were purchased in 2018-19 fiscal. The matter of irregularities and financial loss came to light in 2020. The government’s Office of the Comptroller and Auditor General (CAG) submitted a report in June this year concerning these irregularities in purchases.

Bangladesh Railway is divided into two zones to facilitate proper management of the railways. One zone is on the east of the river Jamuna, known as the East Zone railway (Dhaka-Chattogram-Sylhet-Mymensingh divisions). The one to the west of the Jamuna is the West Zone railway (Rajshahi-Rangpur-Khulna divisions).

The district controller of stores office (R&I department) is an office of the railway’s West Zone in Chattogram. A total of Tk 26.2 million (Tk 2 crore 62 lakh) was misappropriated in the name of purchasing goods for the repair of a room of this office. The officials and contractors together filched this sum in the 2018-19 fiscal, in the name of purchasing 54 types of goods. This incidence of misappropriation appeared in a report of the CAG this June.

CAG has unearthed all sorts of irregularities and corruption in purchases made in 2018-19 by 15 offices of the railway’s East Zone (Chattogram) and West Zone (Rajshahi).

According to their report, at times items were purchased at extremely inflated rates and at times funds were filched without making any purchases at all. The government’s losses stand at Tk 111.88 million (Tk 11 crore 18 lakh 426) due to this corruption.

A review of the audit report reveals that goods have been purchased at multiple times the market rate. For example, an office of the railway’s West Zone purchased a Tk 280 pipe wrench for Tk 8,475. A pedal bin (trash bin) costing Tk 260 was bought at Tk 7500.

According to the audit report, the office of the East Zone Track Supply Officer spent around Tk 20 million (Tk 2 crore) on the purchase of 28 items. Yet the market price of these totals only Tk 1.85 million (Tk 18 lakh).

These items have been supplied by the contractor firm Noor-e-Elahi Brothers Pvt Ltd. They supplied 28 items including 12 lifting jacks. Of these, 5 are of 15 ton capacity and 7 are of 10 tonne capacity. Such machinery is generally bought from India.

The price of such equipment in India is, on average, Rs 11,500, equivalent to Tk 16,100 in Bangladeshi currency. If other costs (such as transportation, etc) are included, then the price could be Tk 18,600 maximum. But Noor-e-Elahi and Brothers Pvt Ltd supplied these at Tk 300,000 each.

This equipment is sold online on a website IndiaMART. This Prothom Alo correspondent visited the website and saw that the price of a lifting machine of 15 ton capacity was Rs 9,500. In Bangladesh currency that would be Tk 13,300 per machine.

The audit report stated that a Tk 65,000 drilling machine was purchased for Tk 965,600 (Tk 9 lakh 65 thousand 600). According to market rates, the price of 8 drilling machines should be Tk 520,000 (Tk 5 lakh 20 thousand). Yet around Tk 7,725,000 (Tk 77 lakh 25 thousand) was spent on this. Similarly, a Tk 138,000 rail cutting disc was bought for Tk 1,005,000 (Tk 10 lakh 500). It should have cost Tk 1,105,000 (Tk 11 lakh 5000) to purchase 8 machines, but instead around Tk7,575,000 (Tk 75 lakh 75 thousand) was spent for the purpose.

Speaking to Prothom Alo about the abnormally inflated prices paid for goods, chief engineer of the railway’ East Zone Abu Zafar Miah said that he hadn’t been in this office when these purchases were made. However, as far as he learnt, high quality machinery had been purchased from Germany. That is why, perhaps, the prices were high.

The office of the contractor firm Noor-e-Elahi and Brothers Limited is in Halishahar Housing Estate of Chattogram. One of the proprietors of the company, MN Karim, is also the chairman of Ocean Paradise Hotel in Cox’s Bazar.

Speaking to Prothom Alo, he said that the equipment has been imported from Germany. His firm was the local agent of a German company. He said the price of the equipment he supplied was high because of the quality and the durability of the equipment. He said that the bill for the goods had not been inflated.

However, according to the audit report, CAG has sent letters twice to the office of the East Zone track supply officer in 2020 regarding the price of machineries supplied by Noor-e-Elahi Brothers. No reply has been received till date. CAG sources say that such machineries are generally imported from India.

A review of the CAG report reveals that in the 2018-19 fiscal, 21 types of goods were purchased at two to three times higher the market price for the railways’ electrical engineers office in Pahartali, Chattogram.

This entailed an additional cost of Tk 400,000. Also the railway’s chief store controller’s office in Pahartali, Chattogram, that same financial year bought 50 walkie-talkies for Tk 5 million (Tk 50 lakh). The market price of 50 walkie-talkies is Tk 900,000. The market price of each walkie-talkie is Tk 18,125, yet these were bought for nearly Tk 100,000 each.

According to the audit report, certain railway officials in collusion with the contractors bought the walkie-talkies for 5.5 times higher than the actual price. This incurred Tk 4.1 million (Tk 41 lakh) in losses for the government. The Chattogram CRB store controller’s office purchased 90 LED lights and 50 LED lamps at Tk 3.2 million (Tk 32 lakh). Yet the market price is Tk 900,000. That means, these were purchased for around 3.5 times higher than actual price.

The audit report also reveals that Tk 26,271,000 (Tk 2 crore 62 lakh 71 thousand) was misappropriated in the name of repairing the corrugated tin office room (185ft X 37 ft) of the R&I department of the Railway East Zone’s chief store controller’s office.

This allocation was made in the name of renovating the office room to improve the work environment. The audit report said that the entire amount was misappropriated by the officials of the department in collusion with the contractors.

In fact, bill for purchase of goods were made out in the names of contractors not even involved in the work. For example, a bill was paid to a contractor for the purchase of slabs for Tk 9,524,000 (Tk 95 lakh 24 thousand) purportedly for room repairs.

General manager of the Railway East Zone (Chattogram) Jahangir Hossain, told Prothom Alo that the audit report hadn’t reached his office as yet. If any irregularities or corruption were revealed in the report, an inquiry committee would be formed and measures would be taken accordingly.

The price of an 8 inch pipe wrench in the market is Tk 220. But this was purchased for Tk 6,475. Similarly, a 12 inch pipe wrench costing Tk 280 was bought for Tk 8,475. That means, an 8 inch pipe wrench was bought for 29 times the actual price and the 12 inch pipe wrench for 30 times the price.

The Lalmonirhat assistant mechanical engineers office of the Railway West Zone similarly resorted to massive irregularities in the purchase of 19 types of small machinery. In some instances the prices were double the market price, and in some instances these were 30 times the market price.

All these instances of irregularities and corruption were revealed in the CAG audit report. Interestingly, the irregularities and corruption incidents in the East Zone took place in the 2018-19 fiscal. CAG found the irregularities and corruption of the West Zone to have taken place in the same financial year.

The store controllers’ office of the Railway West Zone (Rajshahi) purchased at least 50 items including insecticide, Harpic, bleaching power, shovels and dustpans for 2 to 5 times the actual price. A surplus of Tk 20 million (Tk 2 crore) was spent for these purchases. The CAG report says that The market cost of those items total Tk 8.8 million (Tk 88 lakh).

According to the audit report, the reply given by the concerned offices to the CAG regarding these purchases, was not satisfactory. Accordingly, it has been recommended that the reasons for these inflated expenditures be identified and that the surplus expenditure be recovered and deposited with the government treasury.

Meanwhile, the CAG has found papers regarding the purchase of 220 luggage trolleys for the divisional offices of the chief commercial manager’s office of the railway’s West Zone. Yet the trolleys could not be located. But the papers show that the contractors’ bills of Tk 2,265,000 (Tk 22 lakh 65 thousand) have been paid for the purpose.

Speaking to Prothom Alo about the issue of high cost purchases and misappropriation of funds, the railway West Zone (Rajshahi) general manager Ashim Kumar Talukdar said he too hadn’t received the CAG report as yet. If he is asked to reply to any objection regarding purchases, he will respond. If the response is not found satisfactory, the ministry can form an inquiry committee. Steps will be taken against anyone who has committed any irregularities.

The CAG report regarding the irregularities and corruption in railway purchases remarked that each and every government official must practice caution in the expenditure of public funds just as a farsighted person practices caution in spending his own funds. Every departmental head is responsible for financial discipline and strict austerity in spending in every area. He is responsible to ensure that his own office and the officials serving under this follow the rules and regulations.

The picture that has emerged in the CAG report regarding the purchases made in the railway is a matter of institutional corruption, says Transparency International Bangladesh (TIB)’s executive director Iftekharuzzaman.

Speaking to Prothom Alo, he said that despite huge expenditure of state funds, the service of the railway has not improved. There is a powerful quarter before the railway corruption, other than the concerned officials. A neutral inquiry needs to dig deep and identify these persons behind the scenes and ensure accountability. Unless action is taken against the responsible persons, it will not be possible to prevent such corruption.

(Chattogram correspondent Sujan Ghosh assisted in providing information for this report.)