Shiraz Nizami
The courts have yet to decide the fate of huge and allegedly corrupt investment in the real estate by the bigwigs of state-managed Employees Old-age Benefit Institution (EOBI), while the Auditor General of Pakistan surfaced another corruption case in the same institution. The fresh revelations are about shady deals of lands in Karachi, Lahore and Sukkur. The EOBI officials made these purchases at higher prices as compared to market rates and caused loss to national exchequer to the tune of Rs388.83 million.
EOBI is an organization meant to manage worker’s funds and has a vital role in providing social security to poverty stricken factory labors. The institution does not receive any financial assistance from the government for carrying out its operations. A contribution equal to 5% of minimum wages has to be paid by the employers of all the industrial and commercial organizations where EOBI act is applicable. In the last fiscal year (July 2012 to August 2013), EOBI collected Rs1,609 million from employees working in industries. Currently, the EOBI is the custodian of a fund worth Rs100 billion (approximately).
Despite having a huge fund of worth trillion rupees, on the event of retirement it gives away a paltry of Rs3,600 monthly to the pensioners. The EOBI failed to increase the minimum scale of pension only because of massive corruption in the organization.
Auditor’s General report for the year 2012-13 revealed that the funds from poverty stricken factory labors’ had huge financial irregularities to the tune of Rs388.83 million because of making unauthorized purchases of properties at higher rates. The Auditor General has recommended the investigation of these serious irregularities and the fixation of responsibility to the person involved.
The Operating Manual of the EOBI provides that before purchase, valuation of land/buildings shall be carried out through government controlled consultants i.e. PEPAC, NESPAK, REMCO etc. only. The audit report mentioned two cases where the EOBI high-ups’ made purchases at higher rates compared to the market value.
In the year 2011-12, the EOBI management invited bids to buy a piece of land measuring 19,360 sq. yd., located near Karachi airport. The piece of land was owned by Mr. Deh Mehran. As a contradiction to the rules, the EOBI hired a private firm M/s AAA Partnership (Pvt.) Ltd, to evaluate the land price. 
The evaluation firm rated the monetary value of land at Rs95,000 per sq. yd. The audit team observed that the assessment of land by M/s AAA Partnership (Pvt.) Ltd was only an exercise to determine pre decided value and was also wastage of fee paid to evaluation firm. Even then the EOBI management ignored the evaluation by a private firm and purchased the land at Rs104, 500 per sq yard, causing a loss of Rs 183.92 million to national exchequer.
Still, when contacted, the EOBI authorities insist that the purchase was made in accordance with the rules and approved by BoT.
Another example of such malpractice was observed in the procurement of land in Lahore and Sukkur. According to the latest audit accounts of the EOBI, it was found that in response to bids invitation by the EOBI for purchase of land, two properties were considered by the management for purchase of land located in Lahore, measuring 01 Kanals and 8 Marlas at Lower Mall Lahore and another in Sukkur, measuring 2,428 sq. yards located at Military Road. These properties were evaluated at Rs84 million and Rs120.91 million respectively. Surprisingly, the EOBI officers did not negotiate and purchased the properties at bid prices of Rs204.91 million, and again made a loss to the national exchequer.
The audit observed that the EOBI didn’t announce the date and time for opening the bids and the bids were not opened in the presence of the bidders. The properties were evaluated/ assessed by private evaluation firms instead of government controlled consultants, like PEPAC. NESPAK, REMCO. etc.
The audit team recommended investigation of the matter for fixing responsibility on the person(s) at fault. In recent years, a number of incidents of corruption were unearthed in the EOBI, each of them were worth billions. The government needs a complete overhaul to eliminate corruption that has a very bad impact on the financial health of the pensioners’ institution.
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Reference: Auditor General of Pakistan’s Audit Report on The Accounts of Public Sector Enterprises Audit Year 2012-13, Pages 154-155
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