Defence
Ministry Publicly Indicts PIA Chairman for Non-Transparent Aircraft
Sales
By
M T Butt
ISLAMABAD,
March 5: Corruption in Pakistan International Airlines (PIA) exploded
in Pakistan’s Parliament on Friday, March 4, and in a stinging
indictment the Defence Ministry admitted that PIA’s attempt
to sell eight old Boeing aircraft was not transparent and the
process had been scrapped. New “sealed bids” would
now be invited.
"In
view of the apprehensions that the procedure adopted for selling
the aircraft was not transparent, it has been decided that sealed
tenders would be invited," the State Minister for Defence,
Zahid Hamid, told the National Assembly while responding to a
"calling attention notice" moved by the Opposition who
alleged that kickbacks or commissions were involved in the deal.
The
belated admission by the Ministry in Parliament immediately gave
rise to speculations about the future of Chairman Ahmed Saeed,
who has been running PIA like his personal fiefdom because he
enjoyed support of some key people in General Musharraf’s
circle of close friends.
But
opposition to Saeed has been growing both within the Shaukat Aziz
Government and outside and both Prime Minister Aziz and his cabinet
ministers have been sending signals to Musharraf not to extend
the tenure of Chairman Saeed who is due to retire in next month.
Aziz
stopped Government funding for purchase of replacement aircraft
for the PIA’s Fokker fleet late last year and Senate’s
Defence Committee has been probing PIA affairs with increasing
vigor, mostly on the basis of reports and documents published
by the South Asia Tribune in the last several months.
PIA has also been generating bad news under Saeed regularly as
it messed up with the Umra operation when almost 20,000 passengers
got stranded in Jeddah while just last week a PIA B-777 caught
fire at Manchester Airport forcing an evacuation of all passengers.
A
massive charge sheet was issued by top PIA Executives and staff
against the Chairman listing all his deeds and misdeeds but because
General Musharraf personally protects Ahmed Saeed, originally
in the shoe-making business, no one has been able to bring him
to account. The National Accountability Bureau of Musharraf appears
to be impotent when dealing with friends of Musharraf.
Senate
Committee Chairman Senator Nisar Memon has been quietly urging
his fellow members to go and get Saeed as he is also aware of
the massive mismanagement in PIA but was feeling helpless because
Saeed was supported by Musharraf’s close aide Tariq Aziz.
The
rebuke to PIA and admission of guilt by the Defence Ministry inside
Parliament on Friday marked another escalation of the campaign
against Saeed but sources close to Saeed confidently claimed in
Karachi he had been assured by Tariq Aziz that General Musharraf
will extend his tenure, at least by one more year in April.
Saeed
has in the past few months sacked two of his closest accomplices,
AVM Niaz Hussain and Deputy Managing Director Kaleem Malik, both
deeply involved in all the purchase deals Saeed made in his 4-year
tenure. Both have been given lavish retirement packages to keep
their mouths shut. Both are not expected to speak out against
Saeed as they would incriminate themselves if they did so.
Yet
the Parliamentary Opposition and members of the Shaukat Aziz cabinet,
who do not like Ahmed Saeed, have been consistently trying to
undermine his position and expose his corruption through the parliamentary
process. Friday was their biggest day of success as they forced
the Ministry of Finance to admit that Saeed was trying to sell
off 8 Boeing aircraft through hush hush deals and the Ministry
had now intervened to scrap the entire process and start a transparent
process all over again.
The
PIA was trying to sell six A-300B4 and two B-747 aircraft worth
millions of dollars but the Senate Committee last month went to
Karachi to probe the deal and cross examined Chairman Saeed on
all matters.
Sources
told the South Asia Tribune Saeed was asked about his
purchase of the B-777 Boeings from the US through off-shore companies,
specially Taxila Limited. One senator asked him to answer the
specific question: What is the price at which PIA has bought these
planes from Taxila Ltd and what is the price which Taxila Ltd
paid to Boeing. Chairman Saeed could not answer the question as
it would have exposed the deal.
The
Committee also dug deep into the financial position of PIA and
noted that the picture painted by Chairman Saeed was totally misleading
and instead of projected profits Saeed was asking the Government
to provide billions of rupees in aid to pay installments for B-777
loans.
MNAs
Sherry Rehman, Nawab Yousaf Talpur, Qamar Zaman Kaira, Khurshid
Ahmed Shah and Raja Pervez Ashraf, had moved the National Assembly
over sale of the old Boeing aircraft by PIA at inappropriate prices.
The MNAs raised the issue as "a matter of urgent public importance"
as the PIA grounded the A-300B4 aircraft causing doubt about the
future of hundreds of employees, including highly trained flight
engineers who received a blank roster of duty this month. Some
22 weekly flights of A-300B4 had already been cancelled by the
PIA management in anticipation of its plans to sell the aircraft
for which 12 bids were received.
PPP’s Sherry Rehman questioned PIA's policy of selling the
A-300B4 aircraft despite their air worthiness and feasibility
on Middle Eastern and European routes. She said PIA was planning
to go ahead with the sale after installing latest GPS navigation
systems worth $2million on the aircraft. She said PIA management
had by-passed the parliament while taking an important decision
and should be held accountable for attempts to scuttle the procedures
of parliamentary accountability.
Rehman questioned the rationale of PIA's policy to sell its own
A300-B4 while the airline had leased a similar A300-B4 passenger
aircraft from MNG for approximately $2 million lease rental. She
challenged the rationale of leasing A-310 aircraft for which the
PIA would be paying $15 million per annum over the next ten years
while the A-300B4 were airworthy and feasible in their operational
life for the next few years. She said the PIA deferred the sale
only after the Senate Standing Committee on Defence held an inquiry
and objected to the PIA's plans to sell the aircraft in a manner
which was not transparent.
MNA
Khurshid Shah said the House should be apprised about the reasons
for selling the airworthy aircraft and purchasing expensive new
aircraft in their place. He demanded that complete comparative
details about the airworthiness, age and route feasibility of
A-300B4 and A-310 should be placed before the House.
MNA
Raja Pervez Ashraf said the PIA's decision to take the A-310 on
lease had put a burden on the national exchequer. He said the
matter of sale of A-300B4 should be investigated thoroughly. While
questioning the PIA's decision to sell the A-300B4 despite their
airworthiness, MNA Ashraf said, "Is it a matter of kickbacks
and commissions?"
Internal audit reports of PIA show that not only the parliament
was by-passed but a post facto approval of the PIA Board was taken
for the fleet replacement plan and the subsequent deals which
has indebted PIA to the tune of $300 million for the next ten
years.
"...the decision to change the fleet plan was taken a few
months earlier than the date of the Board approval as also evidenced
from the minutes of the audit committee held on October 9, 2003
and the Corporation's maintenance program for the fleet,"
audit objection in para 1.1.2 of the auditor's report for the
year 2003 revealed.
In view of these strong statements, the Parliamentary Secretary
for Defence said it had been decided to reject all the previously
received bids and invite "sealed bids" for the sale
of the aircraft in a transparent manner. Then the Minister of
State for Defence, Zahid Hamid, tried to answer the questions
raised by the Opposition.
The
Minister, while conceding that the process previously adopted
by the PIA for the sale of the aircraft was less than transparent,
said in view of the apprehensions, "sealed bids" would
be invited afresh through advertisements. He said the impending
sale to the previous bidders had been quashed.
