Audit uncovers Rs16.94bn irregularities in KP minerals department

PESHAWAR: An audit report by the Auditor General of Pakistan has uncovered financial irregularities amounting to Rs16.94 billion in Khyber Pakhtunkhwa’s Minerals Department, raising concerns over revenue collection, illegal mining and the recovery of outstanding dues.

According to the report, illegal mining caused an estimated loss of Rs8 billion to the provincial government. It also found that Rs4.31 billion in outstanding payments could not be recovered from defaulting contractors.

The report identified several other areas where weaknesses in enforcement and revenue collection resulted in financial losses for the province. Failure to prevent illegal mining reportedly caused an additional loss of Rs1.83 billion, while the non-recovery of dues from mineral leaseholders resulted in a loss of Rs810 million.

The audit also highlighted financial losses linked to joint venture profits that had not been deposited into the provincial government’s accounts. This shortfall was estimated at Rs580 million, according to the report.

In another finding, the government suffered a loss of Rs140 million because rent for public land was collected at rates described in the report as excessively low.

The report further stated that Rs530 million in mining-related dues for small dam projects remained uncollected in the province. The failure to award mineral contracts also resulted in an estimated loss of Rs250 million to the provincial exchequer.

Revenue collection shortcomings were also identified in Mardan district, where outstanding royalty payments amounting to Rs63.6 million had not been recovered.

The findings point to significant gaps in the Minerals Department’s management of mining activities, enforcement against illegal extraction and recovery of government revenues. The report’s figures highlight the need for stronger monitoring, improved collection mechanisms and effective action to recover outstanding dues.

The audit findings do not, by themselves, establish criminal wrongdoing by any individual. Further action by the relevant authorities would be required to determine responsibility and address the reported irregularities.