OFFICE OF THE DIRECTOR MARKETING (FORESTS) PUNJAB; LAHORE.

PHONE: 042-99200779, To, The Secretary, Government of the Punjab, Forestry, Wildlife, Fisheries & Tourism Department; Lahore. No. Subject: / PROBE- 8 /DMF Dated Lahore, the - 2011. FAX: 042-99203867, E-Mail: dmf.lhr@gmail.com

SCRUTINY OF THE AUCTION PROCEDINGS OF BHAKKAR FOREST DIVISION HELD ON 24-05-2011.

Reference: 1). Admin. Deptt. letter No. SOFT (EXT) VIII 26 / 2011 Dated 15-06-2011. 2). Admin. Deptt. letter No. SO (E-I) 288-1/91 Dated 06-08-2011. As desired, the investigation report on the subject is hereby submitted in compliance of the administrative department orders under reference regarding scrutiny of the auction proceedings of Bhakkar Forest Division, held on 24-5-2011. It is for favor of perusal and further necessary action please. ENCL: (Pages 1 - 8).

(MUMTAZ AHMAD BABAR) DIRECTOR MARKETING (FORESTS), PUNJAB; LAHORE. No. & Date Even. Copy is endorsed for favour of information and further necessary action to: 1. 2. The Chief Conservator of Forests (P M & E) Punjab, Lahore. Mr. Liaqat Ali Gill, Divisional Forest Officer (Dev: & W P-I); Lahore (Member).

DIRECTOR MARKETING (FORESTS), PUNJAB; LAHORE

SCRUTINY OF THE AUCTION PROCEDINGS OF BHAKKAR FOREST DIVISION HELD ON 24-05-2011.

A. THE BACKGROUND. The matter relates to the scrutiny of the auction proceedings of Bhakkar Forest Division held on 24-5-2011. The Administrative Department (AD) vides letter No. SOFT (EXT) VIII 26 / 2011 Dated 15-06-2011, constituted a Probe Committee comprising of Mr. Liaqat Ali Gill DFO (DWP-I) Lahore and the undersigned. Mr. Liaqat Ali Gill DFO (DWP-I) Lahore submitted his report to the AD vides his letter No. 1462/DWP dated 21-6-2011 but the AD vides letter No. SO (E-I) 288-1/91 Dated 06-08-2011 directed to submit a joint report of the committee within three days. The DFO Bhakkar was telephonically informed to come up along with all the relevant records of the auction in question on 07-08-2011(Sunday) in the office of DFO (DWP-I) Lahore at 0900 hours. The DFO Bhakkar attended the probe along with his staff but he did not provide the committee with the relevant records. He requested for more time and finally he was directed to attend the probe on 13-08-2011. He, after exchanging his notes with the CF Sargodha refused to note the directions of the committee as reported vides this office letter No. 74/PROBE-8/DMF dated 08-08-2011. The report was personally submitted to the Additional Secretary Forests, Lahore. The matter of misconduct of the DFO Bhakkar was taken up by the administrative department and the DFO Bhakkar was directed by the Deputy Secretary (Admin) Forests, Lahore to attend his office on 13-08-2011 along with relevant records. The DFO Bhakkar attended the said venue at fixed date and time, hence this probe. B. THE INVESTIGATIONS. The following records of Bhakkar Forest Division pertaining to the auction held on 24-05-2011 were scrutinized (Annexure-A-I & II, Pages 1-11). 1. Marking Lists of the lots included in the lotwara for auction on 24-05-2011. The marking lists of 96 lots contained in the Lotwara (Annexure-B, Pages 13-29) for the said auction was scrutinized with the following observations: a) The column of remarks of all the marking lists was filled in properly indicating the condition of the material on the basis of which the previous DFO proposed the reserve rates for these lots and the CF approved the same for at least one year i.e. for 24 auctions. b) The predecessor DFO took the girth as per record for the lots of his tenure whereas the present DFO took the girth of trees as per site. c) The rectification process of the contents of the marking lists as required vides AD letter No. SOFT (EXT) VIII-30/2010 dated 18-05-2010 (Annexure-J, Pages 109-111) was not carried out by the committee constituted by the AD i.e. the CF, the DFO and the SDFO/RFO concerned. No such formal order of the CF Sargodha was found on record regarding rectification of cubical contents involved. (Contd. Page 2).

(Page -2) d) e) The concerned SDFO/RFO in charge did not sign the marking lists in most of the cases but were signed by the adjoining SDFO/RFO. The certificate at the end of each marking list produced by the concerned SDFO/RFO indicates the 100% correctness of these lists including the entries of the remarks column hence there was no need to revisit the lots. The DFO produced his certificate for checking of 25% contents of the marking lists. His certificate to that effect and no corrections in the lists confirms that the lists were correct and there was no need to revisit the lots. The contents of the marking lists are homogenous in contents with those lots already sold with the same contents on the higher rates. The signatures/initials of the checking committee i.e. those of Mr. Ejaz Ahmed DFO Attock and Mr. Liaqat Ali Jaffri, DFO TED Rawalpindi are not available on even a single entry of the marking lists. The DFO Bhakkar was requested personally and telephonically so many times to provide the copies of the marking lists but he did not respond. It is comprehended that he is not providing the same due to the above mentioned lacunae in the marking lists. The calculation of the difference of the cubical contents of the trees as per site and as per records to assess the extent of expected loss to the government is not possible till the provision of the copy of the said marking lists by the DFO Bhakkar. Thats why he is not supplying the same.

f)

g) h)

i)

j)

2. Technical Sanction of the Material to be Auctioned. a) The technical sanctions for 77 lots of Dead, Wind Fallen (DWF) trees were found on record along various canals of Bhakkar Forest Division. b) The technical sanctions for 19 lots along Lahore-Bhakkar Road were not found on record although NOC was issued by the AD in respect of these lots. 3. Reserve Rates (Annexure-C, Pages 31-67). All the approved/Un-approved reserve rates for 24-05-2011 were scrutinized with the following observations: a) In the column of rates approved by the CF, the phrase is written as Get rate and submit with full justification for some of the lots whereas he did not assign any justification in favour of his deviation from the reserve rates endorsed to him by the CCF(NZ) Rawalpindi. b) Against some of the lots, the phrase is written as Approved as proposed and submit with full justification which clearly indicates that the phrase as mentioned in Para 3 (a) above is totally different from the phrase of this Para. Both are on 180 degree from each other with quite different meanings. c) Basically, the process adopted for decrease in reserve rates by the DFO, the CF and the CCF was in violation of the set principles contained in the circular (Contd. Page 3).

(Page 3) d) No. 33/1973-74/ST dated 05-09-1973 and the letter No. SOFT (EXT) I-I/91 dated 12-04-2004 issued by the AD and hence having no legal value. There is no provision of any such committee, which can reduce or recommend the reduction in reserve rates once approved by the CF. The reserve rates approved and communicated by the CCF on the bases of the recommendations of an unlawful committee carried no weight and the auction conducted on the bases of such illegal reserve rates was also illegal. The committee on one hand being illegal, never met on the other hand so far as the case of Bhakkar Forest Division is concerned as is evident from the contents of the extract copy of the tour diary of Mr. Ejaz Ahmad DFO Attok, one of the members of the so called committee (Annexure-D, Pages 69). The CF has absolutely no authority to reduce the reserve rates of a certain lot once he has himself approved the reserve rates for the said lot.

e)

f)

g)

4.

Auction Results (Annexure-E, Pages 71-83). The auction results issued by the DFO Bhakkar w.e.f 24-05-2010 in general and that of 24-05-2011was scrutinized in specific and the following observations were made. a) Average rate of last 3 auctions and average rate of last auction were not given in some of the cases. b) The average rate per Shisham Unit (SU) was calculated to be Rs. 624/- , 619/- and 593/- for average contents of 41, 38 and 31 Shisham Units per tree respectively whereas the average rate of the lots auctioned on 24-05-2011 becomes Rs. 220/- per SU for the average contents of 26 SU per tree (Annexure-F, Page-85). c) The above comparison indicates that the rates of the auction were significantly lower than those of the previous auctions with reference to the average contents of these lots and has no proportions with each other. d) The auction result does not indicate the approved reserve rates for the lots from where it could be ascertained to what extent the reserve rates are reduced and by what competent authority? e) The auction result of the auction dated 24-05-2011 indicates that the lots for which the CF did not approve the reserve rates and directed the DFO to Get the Rates and submit with full justification were shown as sold and the auction result was submitted to the CF and the CCF as such. f) Those lots, for which the CF did not approve the reserve rates, were also sold in personal supervision of the CF under the central auction system. g) The loss calculated for 84806 SU sold on 24-05-2011 on the bases of decreased reserve rates (Rs. 220/- per SU) below the prevailing weighted average rates in the Bhakkar Forest Division (Rs. 480/- per SU) is Rs. 220,84,009/-. (Contd. Page 4).

(Page 4) 5. Case Regarding decrease of Reserve Rates (Annexure-G, Pages 87-105). The correspondence regarding the constitution of committee for decrease in reserve rates was scrutinized with the following observations: a) The DFO Bhakkar, in violation of circular No. 33/1973-74/ST dated 05-09-1973 requested the CF for constitution of a committee for decrease in rates for 65 lots vide his letter No. 6525/L dated 3-3-2011. b) The CF (Sargodha) in violation of circular No. 33/1973-74/ST dated 05-09-1973 requested to the CCF for constitution of the committee vides his letter No, 985/L dated 4-3-2011 for the decrease in rate of 65 lots but in his DO letter addressed to the CCF vides No. NIL dated 12-4-2011 for decrease of rates of 167 lots of Bhakkar Forest Division although the DFO Bhakkar requested the decrease of reserve rates for only 65 lots. c) The loss calculated for 84806 SU sold on 24-05-2011 on the bases of decreased reserve rates (Average weighted rate of Rs. 220/- per SU) below the prevailing weighted Average rates in the Bhakkar Forest Division (Rs. 480/- per SU) is Rs. 220,84,009/- (Annexure-H, Pages 107-109). d) The CCF (NZ) Rawalpindi constituted a committee vide his letter no. 1164/AL dated 12-4-2011 comprising of Mr. Liaqat Ali Jaffrey DFO TED Rawalpindi and Mr. Ejaz Ahmed DFO Attock in addition to the local DFO as member of the committee which is null and void ab initio under the rules. e) The committee signed a letter addressed to the CCF vides letter No. NIL. Dated NIL office of origin NIL as covering letter to the recommendations made by the committee signed by all the concerned DFOs including the members of the committee. There is no date under the signatures of any of the DFOs/members of the committee. f) The committee recommended decrease in rate for 95 lots although the DFO Bhakkar requested for only 65 lots and CF requested for decrease in rates of 167 lots for which the DFO never requested the decrease in reserve rates of the rest of the 102 lots. g) The rates proposed by the committee were endorsed by the CCF to the CF as authority into the matter for further necessary action although he had no such authority to constitute the committee in to the matter to decrease the reserve rates through such a committee. h) The CF did not agree to the recommendations of the committee endorsed by the authority (CCF) and did not approve the same for certain lots whereas he agreed and approved the rates for other lots although he had no such authority to disagree with the rates endorsed by the competent authority (CCF) although the whole process was illegal and he requested for the adoption of the illegal procedure to the CCF. i) The committee never met in the field as is clear from the extract copy of the tour diary of Mr. Ejaz Ahmed DFO Attok as he only visited Sargodha and Khushab divisions on 18-5-2011 and 19-5-2011 respectively. He never visited (Contd. Page 5).

(Page 5) Bhakkar Forest Division for the purpose of the committee. Mr. Saeed Tabassum DFO Khushab informed that he signed the covering letter from the committee on 23-5-2011 along with other DFOs while being at Rawalpindi which was the date of issue of the letter from the CCF into the matter. As a matter of fact, the reserve rates once approved can not be reduced by the CF. The DFO, if he finds some justifications to sale out the material at certain rates below the approved reserve rates, he is required to submit the case to the CCF through the CF. The CCF may approve the rates so proposed by the DFO. There is no provision for the decrease of reserve rates through any committee in the Circular No. 33/1973-74/ST dated 05-09-1973 as is laid down in Para 4-(a, b & c), 5 and 6 of the said circular issued by Mian Muhammad Rafi the then Additional CCF Punjab, Lahore. The letter No. SOFT (EXT) I-I/91 dated 12-04-2004 issued by the AD on the issue also conveys very clear instructions in to the matter. The whole process adopted by the DFO, the CF and the CCF is in violation of the set rules and procedures of approval of reserve rates.

j)

6.

Bid Sheets. The DFO Bhakkar informed that he had no previous records of lots offered for sale pending since last year. He was supposed to keep the record of those lots on bid sheets for which the contractors offered either no bids or bids lower than the reserve rates. So it can not be determined what rates were offered by the contractors for the said lots.

7. Tour Diaries of the committee members. Mr. Liaqat Ali Jaffrey DFO TED, Member of the committee, even after being requested many a times personally and telephonically, refused to provide the extract copy of his monthly diary for scrutiny for the month/dates on which he visited the Bhakkar Forest Division for the purpose of the committee. The other member, Mr. Ejaz Ahmed DFO Attock has supplied the extract copy of his tour diary indicating that he only visited Sargodha and Khushab Forest Divisions and not the Bhakkar Forest Division. C. THE RESULTS/FINDINGS. Keeping in view the above investigation and discussion into various technical aspects of the auction in question, following deductions are made: 1. The procedure for rectification of the difference in cubical contents of trees having difference in girth as per records and as per site was never adopted by the relevant RFO/SDFO, the DFO and the CF as laid down in the letter No. SOFT (EXT) VIII-30/2010 dated 18-05-2010 constituting the committee of the above mentioned office bearers for the purpose. The technical sanction was illegally granted by the CF for these lots and the lots were put to auction by the (Contd. Page-6).

(Page-6) DFO without adopting the proper procedure which was illegal. The request for constitution of a committee to decrease the reserve rates initiated by the DFO Bhakkar, the endorsement of the same by the CF Sargodha and order of the CCF for the constitution of the said committee were illegal. The rates of lots reduced by the committee without any field inspection, without wetting of the marking lists, without adopting the proper procedure and without any legal authority were illegal The rates of 95 lots were reduced instead of 65 lots requested by the concerned DFO which has no justification being over and above the demand. The CCF endorsed the recommendations of the committee without scrutiny of the case regarding the above mentioned aspects. Although the whole process adopted for reduction in reserve rates was illegal, the CF had no jurisdiction to disagree to the reserve rates endorsed by the CCF. Although the CF did not agree to the reserve rates endorsed by the CCF and directed the DFO to Get rates and submit with full justification he personally supervised the auction proceedings on 24-5-2011 under the Central Auction System and failed to stop his DFO from auctioning those lots. The CF also failed to take any action against the DFO for auctioning those lots for which he did not approve the reserve rates. The DFO violating the instructions of his senior auctioned those lots for which his CF had not approved the reserve rates and issued the auction result. The rates of the lots were quite lower than the average rates of DWF trees prevailing in Bhakkar Forest Division for the lots having similar cubical contents per tree and per SU which indicates that the interest of the Department was not watched. The government would have sustained a huge loss if it had not intervened and ordered to scrutinize the auction proceedings as a result of which the CF was forced to cancel the auction. If he himself had taken the initiative to safeguard the interest of the government, he might have had cancelled the auction at site during the process of the auction and stopped the DFO from auctioning the lots in question. On the other hand, he has shown the height of favourtism towards his DFO through his letter No. 1455/AL dated 08-08-2011 addressed to the CCF concealing all the above mentioned irregularities from the CCF. The committee recommended the reserve rates on 23-05-2011 just one day prior to the auction, the reserve rates were communicated by the CCF to the CF and the DFO, the DFO again proposed the said rates to the CF; the CF approved/ disapproved the rates on the same day i.e. on 23-05-2011 in violation of the directions contained in the circular No. 33/1973-74/ST dated 09-05-1973 and the auction took place on 24-05-2011. The auction result was issued on 26-05-2011. The AD intervened in to the matter on 15-06-2011 whereas the CF cancelled the auction on 27-07-2011. If the CF, as contented in his letter No. 1073/AL dated 27-07-2011, had no objection on the auction proceedings or on the reserve rates, on what genuine grounds he cancelled the auction? (Contd. Page-7).

2.

3.

4. 5. 6. 7.

8. 9. 10.

11.

12.

(Page-7) 13. The above question was not addressed by the CCF while favouring the CF through his letter No. 111/AL dated 11-08-2011 addressed to the government concealing all the above mentioned irregularities from the government. It was tried to inflict the loss of Rs. 220,84,009/-, to the National exchequer through this auction by selling the lots at very low reserve rates. This shows the connivance of the DFO, the CF; the CCF and the committee members with each other to conceal the facts of the case. All the above deductions fall under the definition of In-efficiency and Misconduct on the part of the DFO Bhakkar, the CF Sargodha and the CCF (NZ) Rawalpindi under PEEDAA-2006.

14. 15. 16.

D. RECOMMENDATIONS: Keeping in view the above results/findings, following recommendations are made: 1. It should be circulated amongst all the field formations (DFOs, CFs, & CCFs) to keep the records of those lots on bid sheets for which no/low bids are voiced by the contractors so that the prevailing rates of those lots be determined on the basis of the said records for proposing and approving the reserve rates for those lots if required so from the CCF below the reserve rates originally proposed by the DFO and approved by the CF. The reserve rates once approved by the CFs for certain lots should not be decreased by themselves. Rather the case of reduction of reserve rates for such lots should be referred to the CCFs concerned as laid down in the circular No. 33/1973-74/ST dated 05-09-1973 and AD letter no. SOFT (EXT) 1-1/91 dated 12-04-2004. The rates proposed in such cases should be based on the information collected by the DFO from the bid sheets as mentioned in Para (1) above. 2. Mr. Tariq Naseem DFO Bhakkar, Mr. Ajmal Raheem CF Sargodha, Raja Khalid Hussain CCF (NZ) Rawalpindi and the members of the rate reduction committee (Mr. Liaqat Hussain Jaffri DFO TED Rawalpindi, Mr. Ejaz Ahmad DFO Attok & Mr. Tariq Naseem DFO Bhakkar) should be proceeded against as per findings mentioned at Para C (1-16) above on account of their inefficiency and misconduct under PEEDA-2006. ENCL: (Pages 1-113).

Liaqat Ali Gill DFO (DWP-I), Lahore. (Member)

Mumtaz Ahmad Babar Director Marketing(Forests) Lahore. (Member)