Most Immediate Matter

HYDROCARBON DEVELOPMENT INSTITUTE OF PAKISTAN

(CNG OPERATIONS)

PRELIMINARY INSPECTION REPORT ON FAKE CERTIFICATION OF CNG VEHICLES

(Prepared as Third Party Inspector under the rule 10 of CNG Rules 1992)
REPORT NO: DATED: TYPE OF INSPECTION:
HDIP-CNG-INSP(FC)/001/2013

INSPECTION DATE:
COMPLAINANTS:

June 6-7, 2013 CNG Vehicle owners/Driver Gujranwala, Gujrat, Sialkot and Mandi Bahaudin

June 7, 2013 Spot/Surprise Checking of Authorized CNG kit conversion workshops and Cylinder Testing Station

PLACE/REGION:

Note: Field report was prepared on urgent basis. Proper channel was not followed as public lives are at stake. The recommendations and comments contained in this report represents the personal views of the inspection team and do not necessarily represent the organizational views. SUMMARY OF INSPECTION Hydrocarbon Development Institute of Pakistan (HDIP) Inspection wings engineers Mr. Asim Riaz and Mr. Alamzaib were officially deputed to conduct annual inspections of CNG stations. While checking the refueling procedure during annual Inspection of the CNG Stations in Gujrat and its surrounding region, the Inspection team noticed major deficiencies in the CNG vehicles that were certified by approved private 3rd party inspectors of HDIP, Oil & Gas Regulatory Authority (OGRA) and Chief Inspector of Explosives (CIE). Verbal complaints from CNG vehicle owners/drivers and licensee of the CNG station have also been made to the inspection team that fake CNG vehicle/cylinder fitness certificates were being sold at Rs. 1000 to Rs. 10,000/- per vehicle by the private 3rd party inspectors approved by the Government of Pakistan in the province of Punjab. It is requested that the matter must be treated on most urgent basis as the CNG vehicles with fake certification are threat to life and property of general public. The drivers who do not have 3rd party hydrostatic test certificate or vehicle certification from Authorized CNG workshops were arrested by Gujrat police under section 285 of Pakistan Penal Code i.e. negligent conduct with respect to fire or combustible matter. HDIP Inspection team visited Lari Adda Police station where tens of people were under lock-up for using CNG vehicles. Hundreds of motorist using CNG as fuel were arrested after the tragic Mangowal accident. This preliminary report is in two parts which covers 1) fake periodic hydrostatic testing of the CNG cylinders by the HDIP/OGRA/CIE approved private 3rd party Cylinder Testing Station/lab 2) bogus certification of the CNG vehicles by HDIP/OGRA authorized CNG conversion workshops.

18, H-9, Islamabad. TELEFAX No. 9257470 PH: 9257821-24, E-mail: hdipcng@apollo.net.pk

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Part I
FAKE CERTIFICATIONS OF CNG PUBLIC SERVICE VEHICLES (PSV) BY AUTHORIZED CNG CONVERSION WORKSHOP APPROVED BY OGRA The dual fuel CNG Toyota Hiace Van having registration no. C-1441 (NWFP) was being refueled at Lodhi CNG Station, Phalia, Mandi Bahaudin. The driver of vehicle informed the inspection team that the vehicle was approved by OGRA Authorized CNG vehicle conversion workshop. The approved sticker was pasted on the windscreen of the vehicle. The driver informed that fitness verification of the vehicle was carried out at Hamdani CNG station, Phalia. HDIP inspection team visited the said station and found that there was no authorized workshop at the CNG station. The manager explained that Approved workshop was in Hamdani CNG station, Gujrat but verification was carried out in Phalia, Mandi-Bahaudin to help drivers/owners of vehicles. Statement of CNG station manager is attached. The workshop issued no receipt of the payment to the driver. According to the driver charges of workshop varied from Rs. 4000/- to Rs. 7000/- per vehicle and no new parts were installed in most cases. Following deficiencies were observed in certified CNG public service vehicle approved by Authorized workshop of Hamdani CNG, Gujrat having certification no. HDIP-TFIP/WCC/0091-2012. Copy of Certificate is attached. The high pressure pipe was passing through the passenger cabin on floor of the vehicle and could easily be stepped on by the passenger. There was no corrugated pipe installed on the high pressure pipe to protect it from mechanical damage. High pressure pipe was not properly installed and the clamping was inadequate. The CNG cylinders were installed beneath the seats of the passengers. There was no bracket to hold the CNG cylinders. The metal fastener had no rubber padding. There was metal to metal contact between fastener and cylinder that has caused galvanized corrosion in the cylinder. The Inprocil 50 WLC cylinder was installed in the vehicle which is not approved by the Authority. Electrical and sound system wiring is passing along-with the high pressure in the passenger cabin of the vehicle. Non Return Valve (NRV) was not installed between the three way cylinder valve and the filling valve.

Countless vehicles approved by Authorized workshops of OGRA/HDIP with above-mentioned similar deficiencies were found during annual inspection of Gujrat, Phalia, Gujranwala and Sialkot. Some of the certified vehicles had expired cylinders. Snaps are attached for ready reference.

18, H-9, Islamabad. TELEFAX No. 9257470 PH: 9257821-24, E-mail: hdipcng@apollo.net.pk

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Part II
FAKE CERTIFICATION OF CNG CYLINDERS During the checking of refueling procedure of CNG station in Gujrat region, HDIP Inspection team noticed that the hydrostatic testing of vehicle cylinders were carried before the due date i.e. periodic hydrostatic testing is required after every 5 years. The CNG vehicle owners/drivers complained that approved Cylinder Testing Station in Gujrat was charging double the amount prescribed by HDIP/OGRA for hydrostatic testing of the cylinders. Many people complained that only punching was being done and certificate was issued without any testing. HDIP inspection team visited the M.A Trading Cylinder Testing Station, Gujrat at 1330 hrs on June 6, 2013 for the verification of the complaints. The team found some serious discrepancies in hydrostatic testing of CNG cylinders, details are as under: The Cylinder Testing Station was charging total of Rs. 1200/- for hydrostatic testing of CNG vehicle cylinder. However, the receipt of Rs. 550/- only was issued. There were additional charges of Rs. 450/- for removal and installation of CNG cylinders from CNG vehicle. The staff admitted that they are charging Rs. 200/extra as administration/processing fee. There was one person in the cylinder testing area who was only punching the cylinders while rest of the staff was busy in collecting money, issuing receipts, handing and taking over of the cylinders, office/file/computer works and controlling the mob. The hydrostatic bench was not operational due to load shedding. There was only one hydrostatic bench in the cylinder testing station, which does not have UPS or Generator connection. However, UPS was available for the office computers to make the reports of cylinders. During the stay of HDIP inspection team for about 2 hours not a single cylinder was hydrostatically tested. Taking cognizance of the facts that there was a single test bench in lab, frequent load shedding and non-existence of generator/UPS facility for the testing equipment, at most 20-25 cylinders can be tested in 24 hours if proper testing procedures are followed. HDIP Cylinder testing station, Islamabad has multiple hydrostatic pumps and qualified, experience and competent technical manpower, despite that it test 30-40 CNG cylinders daily.

18, H-9, Islamabad. TELEFAX No. 9257470 PH: 9257821-24, E-mail: hdipcng@apollo.net.pk

Most Immediate Matter The M.A Trading Cylinder Testing Station was testing between 100 to 250 CNG vehicle cylinders on daily basis. Daily receipt summary along with vehicle registration numbers is attached. Statistical data proves that hydrostatic testing was not being carried out on CNG cylinders. Cylinder were neither valved or de-valved at cylinder testing station. Certifications for the Hydrostatic testing on the cylinders of the vehicles were issued before the due date. Snaps of 2011 model Suzuki carry van with factory fitted CNG cylinder are attached for reference. Date of manufacturing of the CNG cylinder and water liter capacity was not mentioned in any test certificate. In some certificates, wall thickness was also not mentioned. Certification of unapproved CNG cylinders was being carried out. Staff claimed that they have confiscated 149 CNG vehicle cylinders. There were many complaints that the certificates were not given on first come first serve basis. The influential persons were given priority. The lab in-charge remained frequently in touch with officials of the concerned department during the inspection of HDIP team. The stickers were issued to the vans having more two (2) CNG cylinders, installed beneath the seats inside passenger cabin of the vehicle. Cylinders were mounted without bracket or proper fastening by the M.A Trading Co. for which it charged Rs. 450/- per cylinder. The staff of the cylinder testing station assured customers that after the issuance of the sticker, Gujrat police cannot arrest any driver/owner of the vehicle under any section. It was informed by the owners/drivers of the CNG vehicles that Gujrat Police is treating hydrostatic test certificate as fitness certificate of the CNG vehicle. During the inspection of Gujranwala region CNG station drivers/owners of public service vehicle made similar complaint about M/s Friends Engineering, cylinder testing lab in Gujranwala approved by the Chief Inspector of Explosives (CIE). HDIP team made an unofficial visit to site and found that the lab working was even worse than cylinder testing station, Gujrat. Lab attendant told HDIP team that the lab was testing between 300 to 400 CNG cylinders were tested during on daily basis. Snap of CNG cylinder with inadequate corrosion protection passed by the lab is attached. Friend Engineering cylinder testing lab was also issuing OGRA approved workshop stickers of M/s Green Fuels, Tri Star, Climax CNG Station, Gujranwala having certification no. HDIP-TFIP/WCC/014-2012. This illegal practice was being done to provide both certifications of OGRA and CIE under one roof.

18, H-9, Islamabad. TELEFAX No. 9257470 PH: 9257821-24, E-mail: hdipcng@apollo.net.pk

Most Immediate Matter Hiace van owner Mr. Abdul Majeed (Mobile no. 0322-5643212) verbally told the inspection team that the police department and district administration (RTA/RTS/DCO) ordered that every cylinder whether new or old must be tested from the CIE approved cylinder testing lab. He claimed that in the beginning of this crisis, he witnessed daily tens of hundreds of CNG vehicles were being punched only. He further added that after he got three (3) cylinder certificates for Rs. 3000/-, an additional OGRA approved vehicle sticker was pasted on the windscreen by the lab for Rs. 1000/-. After that he was asked to remove one certified cylinder as OGRA only approved two cylinders per vehicle. Conclusion: Fake certifications of CNG vehicles were given by Authorized CNG vehicle conversion workshops approved by OGRA and HDIP. Hydrostatic testing was not being carried out on CNG cylinders at M/s M.A Trading Cylinder Testing Station, Gujrat and bogus certificates were issued. The common motorists using CNG were compelled to do fake certifications due to the fear of arrest by the Police under section 285 of Pakistan Penal Code. They were being charged above the prescribed government fee in majority of cases. Comments and Recommendations: 1. Before discussing recommendations and technical comments about the problem in hand, it is important to mention two things right at the outset which relate to inadequate awareness and incorrect perceptions about the CNG cylinders. It was surprising that electronic and print media persisted in erroneous reporting that the majority of accidents in CNG vehicles occurred due to bursting/explosion of the CNG cylinders. Add to that, some of the Government departments were also relating these accidents to non-compliance of Hydrostatic testing of CNG cylinders. Both are absolutely wrong impressions. In the context of the foregoing, following points are elaborated for clear and correct understanding of the problem: a) No approved CNG cylinder ever exploded in any accident of the CNG converted public service vehicles in the history of Pakistan CNG Industry. Approved CNG cylinders having manufacturing standard NZS 5454 should never burst or explode and so was the case in last 3 years accidents. Few CNG cylinder burst accidents that happened in the past were all in private vehicles not in the public service vehicles.

18, H-9, Islamabad. TELEFAX No. 9257470 PH: 9257821-24, E-mail: hdipcng@apollo.net.pk

Most Immediate Matter b) Non-compliance of Hydrostatic testing of CNG cylinders after the due date was not the cause of any cylinder accident that ever happened in Pakistan. There is no correlation between CNG accidents and non-compliance of Hydrostatic testing requirement of CNG cylinders; hence relating these accidents with such testing of CNG cylinders is totally incorrect. 2. The fake certifications were unchecked due to lack of awareness/knowledge of CNG vehicle drivers/owners, district administration and Police department about proper installation works of CNG kit and Hydrostatic testing of the CNG cylinders. Hence, awareness campaign on the said issues should be launched through electronic and print media. 3. Former Chairman OGRA introduced private 3rd party inspectors in the CNG Industry. HDIP and CIE followed this trend and outsourced their functions to the private sector. Many of the 3rd party Inspectors, labs and workshops are partly or wholly owned by the government officials and influential persons. The sole purpose of these companies is to maximize their profit and they have no interest in public safety. In addition, the certification and testing private companies had vested interests and were not suitable to be given this responsibility. Detailed comments are attached as Annexure-A. It is therefore strongly recommended that all of the OGRA, HDIP and CIE approved private companies for 3rd party inspectors, cylinder and vehicle testing/verification workshops/stations should be banned immediately. Only government departments should carry out inspections and testing in CNG industry. It is also worth mentioning that no public service vehicle accident occurred when HDIP was sole 3rd party inspector of OGRA/Ministry and accidents in CNG stations were also negligible. 4. At first, the Regulator approved more than 108 authorized workshops for the certification of CNG vehicles for which the All Pakistan CNG association charged about Rs. 300,000/- per workshop. The drivers/owners of CNG public service vehicle spent about Rs. 18,000/- on getting vehicle fitness/test certificates from the OGRA approved facilities. And now the Regulator imposed immediate ban on use of CNG public service vehicle. This shows the extremely poor Regulatory frame work, mismanagement and incompetence of the Regulator to handle the crisis in last two years. This not only result in wastage of billions of rupee i.e. vehicle conversion costs, workshop/labs set up cost and vehicle testing/certification cost but also send confused signals to the future investor and fire fighting approach of the Regulator to handle the crises.
18, H-9, Islamabad. TELEFAX No. 9257470 PH: 9257821-24, E-mail: hdipcng@apollo.net.pk

Most Immediate Matter 5. CNG vehicle is inherently safer than petrol and HSD counterparts. Accidents in CNG public service vehicles have strong co-relation with the gas load management of CNG stations in the Punjab province. Prior to gas load shedding, the vehicle fire accidents in CNG industry were negligible. It is worth mentioning that the driving habits, vehicle road worthiness, CNG kits/cylinders and road conditions of KPK province are generally worse than Punjab; yet there were no such accidents happening in KPK only because there is no gas load shedding. This strengthen the fact that accident occurred in the past were mostly due to lack of maintenance, tempering and alteration of petrol/LPG systems in the dual fuel public service vehicles. Therefore, it is strongly recommended that the public service vehicles should run on CNG as a dedicated fuel. 6. CNG is a subsidized fuel which is half the price of petrol and HSD. The use of CNG in public service vehicle promotes economic activity i.e. CNG PSV is a transport subsidy to lower-income households, passenger kilometers are 10-60 times more, monetary savings are greater in public transports and it is a source of income of driver, owner and supporting Industry related to public service vehicles. 7. HDIP inspection noticed that some of the Authorized workshops were carrying out welding, surface grinding and other works. These works, required for alteration/modification of CNG vehicle, were carried out in an unsafe way which produce sparks in the hazardous area. 8. Attached letter addressed to Chairman OGRA dated: June 20, 2012 strongly recommended that Hydrostatic testing should be replaced by Ultrasonic testing. If it was implemented there was no need to outsource cylinder testing stations as it could be done by HDIP alone. 9. CIE being the approving Authority of M/s Friends Engineering, Gujranwala should conduct full fledge inquiry on the issue. Department of explosives does not have any cylinder testing lab of their own. CIE lacks the experience and expertise in this field compared to HDIP. The engineering and technical staff of HDIP have decades of experience in CNG cylinder testing. It is strongly recommended that a full fledge inquiry by independent technical experts must be carried on the findings of this report on priority in order to fix the responsibility on the concerned under-law to prevent such fake certifications in future. Inspection team:
Mr. Asim Riaz (Senior Research Engineer) Master/B.Sc Mechanical Mr. Alamzaib Khan (Research Engineer) B.Sc Mechanical Engineering

18, H-9, Islamabad. TELEFAX No. 9257470 PH: 9257821-24, E-mail: hdipcng@apollo.net.pk

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Annexure-A
OGRA, HDIP and CIE outsourced function of fitness verification and certification of 3 million CNG vehicles to 108 authorized workshops that can only be setup in CNG stations. These stations were nominated by All Pakistan CNG Association. The Association charged Rs. 300,000/- per authorized workshop out of which Rs. 11,000/- were given to HDIP; as it is the only government department which has competency and expertise to perform inspections of workshops and conduct training of manpower. The decision was inconceivable due to following reasons: a) A CNG Station licensee has vested interest as the CNG vehicle owners/drivers buy CNG fuel and CNG kits/cylinders from the CNG stations. It is known to everybody in CNG Industry that majority of CNG stations are not following refueling procedure as per Pakistan CNG Safety Rules, 1992 just to sell few hundred rupee CNG to vehicles; how can they be entrusted to certify the fitness of the CNG vehicles? Taking cognizance of this fact alone, the decision to set up authorized CNG conversion workshop was incomprehensible. b) CNG Conversion workshops at CNG Station are threat to life and property of general public. Welding, soldering, grinding, wiring and other works which produce sparks are required during installation, modification, alteration of CNG system of vehicle. Tuning and leak checks/tests on a CNG vehicle must be done in an open area as vehicle can catch fire during this. If the vehicle catches fire in CNG station the loss of life and property would be manifolds compared to automarket. Attached Photographs show that some of these works were carried out in hazardous area of CNG dispenser. This is due to lack of space in the CNG station and is the case with most of CNG stations in Country. It is worth mentioning that there are 27,777 vehicles per workshop and its approved space requirement was about the size of kitchen i.e. 25 15 feet. c) Majority of CNG station owner/licensee and their staff have no previous experience of CNG kit installation apart from 7 days training from HDIP for only Rs. 1000/-. Whereas surprisingly the auto-market mechanics labeled as unauthorized Road-side workshop with decades of relative experience were denied to own any authorized kit verification/sticker facility. d) The fee/charge for verification/fitness sticker for CNG vehicle is very high i.e. Rs. 1000/- per visit. Nevertheless, approved workshops were charging more than Rs. 4000/- in some places as mentioned in the report. It is hardly a 5-10 minutes job and is done by a mechanic who has a certificate of 7 days training from HDIP. One thousand rupee training does not include labor cost for modification and installation of new parts.

18, H-9, Islamabad. TELEFAX No. 9257470 PH: 9257821-24, E-mail: hdipcng@apollo.net.pk

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18, H-9, Islamabad. TELEFAX No. 9257470 PH: 9257821-24, E-mail: hdipcng@apollo.net.pk

Most Immediate Matter

18, H-9, Islamabad. TELEFAX No. 9257470 PH: 9257821-24, E-mail: hdipcng@apollo.net.pk

Most Immediate Matter

18, H-9, Islamabad. TELEFAX No. 9257470 PH: 9257821-24, E-mail: hdipcng@apollo.net.pk