Rs1.604bn bonuses, Rs115.6m tea bill: Audit uncovers lavish spending by Sui Gas Companies

ISLAMABAD: The Public Accounts Committee (PAC) was informed on Wednesday that Sui Northern Gas Pipelines Limited (SNGPL) incurred Rs115.6 million in expenses on tea and coffee, club memberships, subscriptions, and included the cost in its human resource (HR) expenses, which were ultimately passed on to gas consumers.

The disclosure was made during a meeting of Sub-Committee-II of the Public Accounts Committee, chaired by Convener Syed Naveed Qamar, at Parliament House. The committee reviewed audit objections relating to the Petroleum Division for the period from 2011-12 to 2022-23.

SNGPL

According to audit officials, SNGPL spent Rs115.6 million on club memberships, subscriptions and refreshments in 2018 and treated the expenditure as part of its HR costs, which were recovered from consumers through gas tariffs.

The audit officials maintained that club memberships, subscriptions and tea and coffee expenses were not part of the company’s operational activities and therefore should not have been passed on to consumers.

They argued that such expenses, particularly executive club memberships, should be borne from the company’s profits instead.

Responding to the objections, SNGPL officials told the committee that club memberships were part of the approved benefits for executives under the company’s board-approved HR manual and service rules. They added that all employee benefits had been granted in accordance with the approved policy.

The officials further informed the committee that employees now bear nearly 50 per cent of the cost of tea and coffee.

During the meeting, Convener Syed Naveed Qamar questioned the unusually high expenditure on refreshments, remarking, “What kind of tea and coffee costs so much?”

He also said that at the very least, the cost of club memberships should not be shifted to the public. “Whenever gas prices increase, people question what the authorities are doing with public money,” he remarked.

The committee was also informed that the Oil and Gas Regulatory Authority (OGRA) had stopped approving expenses related to club memberships, subscriptions and several other non-operational items in tariff determinations from 2021 onward.

After discussion, the PAC sub-committee settled the audit objection.

SSGC – Rs1.604 billion bonus

The committee also reviewed another audit observation regarding Sui Southern Gas Company (SSGC), where audit officials pointed to the payment of Rs1.604 billion in bonuses to executives and employees despite the company not posting a profit.

According to the audit, the bonus payments were not in line with the Finance Division’s guidelines, and the company’s Managing Director was also among the recipients of the bonuses.

SSGC management defended the payments, saying executive performance bonuses were linked to individual performance and were awarded under board-approved service rules rather than the company’s profitability.