ODGCL’s items of Rs 1.8bn turn into scrap

Aftab Ahmed

It is alarming that Oil and Gas Development Company Limited (Ogdcl) has procured store items worth Rs 1.8 billion without any consumption turning into scrap.

The over procurement appears to benefit the contractors as they were procured, which were not required and were not used by the OGDCL.

The procurement in Oil and Gas Development Company Limited (OGDCL) has been a sweet business as it involves a multibillion rupees budget every year.

The case has emerged that OGDCL management procured store items worth Rs 1.8 billion, which the company had never used for several years. The items procured by OGDCL are now turning into scrap.

The shocking revelation has been made in a report available with Newztodays.com.  Control Navigator on Management in a letter and Internal Audit Observations have been made regarding “Procurement of stores items without any consumption in five years preceding its procurement.”

https://newztodays.com/ccop-approves-divestment-of-up-to-7-govt-owned-shares-in-ogdcl/

While reviewing the status of observation, the Chairman Audit Committee of the Board had advised to “provide an action plan for such piled up inventory along with the action.”

In this regard, it is apprised that Materials Management Department is the custodian of inventory; however, query regarding ‘action plan for such piled up inventory along with action’ pertains to concerned technical departments as the material is procured by SCM department on the requirement of technical departments, manager Inventory Control wrote in a letter.

The management of OGDCL awarded a contract to consultant M/s A F Ferguson & Co to verify the aging of Inventory on the cutoff date of January 31, 2019. The consultant has submitted a draft report showing the year-wise age of inventory.

lt is pertinent to mention here that inventory amounting to Rs 1.8 billion has an age of ten years or above. This has resulted in unnecessary blockage of funds, increasing expenditures related to the construction of storage facilities, carrying costs, obsolescence and ages, etc ensuing loss to the company.

Therefore, to comply with the Chairman Audit Committee of Board instructions, technical Departments may be requested to review the inventory listings having the age of sixteen or above attached in the soft form in CD wherein department may be identified through Sub inventory mentioned against each Index and proceed as per following.

The items,  still “Required” for operations but have a utilization plan of the same. Segregated items that are “Not Required” and solicited BOD’s approval to write off these items.

The control navigator revealed this in the Audit Committee of the Board. Therefore, Production, P&P. Drilling, Exploration, and C&ESS-Departments may be requested to provide a monthly status of the assignment for onward submission to the Audit Committee of the Board.