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PTA’s Negligence Causes Losses Of Millions To National Exchequer

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In the recent audit for 2017-18 by the Auditor General of Pakistan, severe negligence on part of the Pakistan Telecommunication Authority (PTA) has surfaced which has caused losses of millions of rupees to the national exchequer.

According to the audit, a copy of which is available with Naya Daur, the negligent acts revealed include incomplete deposit of surplus into the federal consolidated fund, irregular deputation of pay and allowance, unjustified grant of No Objection Certificate (NOC) for merger of Mobilink and Warid, unlawful usage of 3G & 4G services, and non-recoveries. Moreover, there also exist pending recoveries of outstanding dues. Due to this, the national exchequer has faced a huge loss of millions.

Incomplete deposit of Surplus into the FCF

The audit, while highlighting the incomplete deposit of surplus into the Federal Consolidated Fund (FCF) by the PTA, noted that the telecommunication authority deposited an amount of Rs466.298 million into the (FCF) on 23rd November 2016 whereas an amount of Rs 6961.366 million was required to be deposited in the mentioned fund as reflected in the Annual Audited Account (AAA) for the year ending on June 30, 2016.

Thus, the deposit was Rs6495 million less than it should have been. The audit noted that the incomplete deposit of the due amount was a violation and non-compliance of PTA Act 1996, which caused losses to the national exchequer.

Illegal NOC to Mobilink and Warid.

The audit observed another unjustified and unlawful act of the PTA in its awarding of NOC for the merger of Mobilink and Warid. The audit noted that an undue favour was granted to Mobilink due to which the company did not pay the licensing fee, causing a huge loss to the national exchequer.

The audit, while highlighting the favour granted to Mobilink, noted that it was observed that PTA allowed merging the services of both companies, but the license was not merged. This showed that Mobilink availed the benefit of operating two licenses and spectrum without paying the additional cost/fee to PTA.

The audit further noted that the committee formed to investigate the issue didn’t respond to the questions and reservations of the audit authorities. It further observed that the license was awarded illegally in violation of the laws.

It recommended that due to the sensitivity and technicality of the matter, a high-level inquiry committee may be constituted to look into the technical details of the issue.

Additionally, the telecommunication authority awarded an undue favour to Mobilink of Rs 295 million during an auction of the Next Generation Mobile Services.

The audit noted that PTA, while barring other telecom operators from participating in the auction for bidding, awarded an undue favour to Mobilink as the company was the sole participator in the auction, which was a violation of government laws.

Irregular deputation and excess payment.

The audit also observed that irregular deputation and excess payment of pay and allowances was made by PTA due to which the national exchequer had faced a loss of Rs1.106 million. The audit noted that in an act of negligence, an official of the Directorate of Agriculture and Cooperative Department, Government of Balochistan, was taken on deputation for the initial period of two years. The official was a computer operator in BPS-15, while in a corrupt move, the same official was taken on deputation in BPS-17 and posted as an Assistant Director.

A committee was formed to investigate the matter but in another irregular move, the same official was again granted extension by the PTA chairman. The official illegally received the pay and allowances of his position – assistant director (BPS-17) – which resulted in a loss of Rs1,105,905 to the national exchequer.

The audit noted that PTA failed to trace the elements who were backing this move neither recovered the money from the said official.

Loss due to unlawful usage of 4G service in AJK of 61,950 million

The audit also highlighted a loss of Rs61,905 million to the national exchequer due to the unlawful usage of 4G services in Azad Jammu and Kashmir (AJK). Audit observed that PTCL and SCO launched 4G/LTE services in AJK and Gilgit-Baltistan without buying the spectrum and having valid licenses for 4G/LTE services as PTA was yet to start the auction process of the spectrum of 4G/LTE service in AJK and GB.

Unauthorized re-farming of spectrum and permission of 4G/LTE services to Telenor make a loss of 12,012$ million.

The audit noted that PTA, in another illegal move, allowed M/S Telenor to re-farm 5.5 MHZ out of 8.8 MHZ in the 1800 MHZ frequency without first developing a re-farming framework. The decision to re-farm any spectrum is the domain of the federal government, which after consultations with PTA/PEMRA and Frequency Allocation Board will make the decision to re-farm any spectrum. However, PTA did not follow this procedure.

The audit also noted that PTA didn’t prepare any financial costs for the proposed re-farming and allowed M/S Telenor 4G/LTE services without recovery of the cost.

Highlighting the irregular and illegal move of the PTA, the audit noted that while Telenor didn’t participate in the auction of 1800 MHZ spectrum held on 23rd April 2015, the auction was won by CMPAK (ZONG) at the cost of $210 million for 10 MHZ, which resulted in a loss of $12,012.   

Loss of $9.365 million due to termination of calls and non-recovery.

The audit observed that the telecommunication authority served a show cause notice to M/S Wise Communication on 15th January 2014, stating that the operator illegally terminated (Transferred) 106.42 million minutes on the network of mobile operators and PTCL by bypassing the international gateway exchanges. As a result, the operator did not pay the dues on the account of Access Promotion Contribution for USF causing a loss of $9.365 million to the national exchequer.

Non-recovery of outstanding dues of 669.746 million from telecom operators.

The audit also highlighted the administrative failures of the PTA management and noted that the authorities failed to recover an amount of Rs669.746 million on account of USF charges and ‘research and development’ contributions from the operators during 2016-17.

The audit further observed that a loss of Rs43.287 million in non-recovery of annual dues from telecom operators, as well as a loss of Rs385.875 million due to allocation and permission of frequency without recovery also occurred.

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