Chairman
Ahmed Saeed summoned by Senate Defence Committee on June 9
Angry Senators,
MPs Grill PIA Chairman on B-777 Deal
By
M T Butt
ISLAMABAD:
A serious Parliamentary investigation has begun into the affairs
of the Pakistan International Airlines (PIA) after a heated Senate
Defence Committee hearing in which the PIA Chairman was put to
the mat by angry Opposition Senators over the US$1.4 billion B-777
deal by PIA.
The
Senate probe began after a series of investigative reports published
by the South Asia Tribune in which it was revealed that
PIA was misleading the Government and the Parliament.
The Opposition in the Senate requisitioned
the Defence Committee hearings in which the PIA Chairman and other
executives were summoned.
The
hearing erupted into a major controversy when an official press
release by the Committee Chairman mistakenly claimed that the
Committee had expressed its satisfaction over the deal.
Opposition
Senators protested the claim and in turn filed a Corruption Reference
with the National Accountability Bureau (NAB) to demonstrate that
the Committee was not satisfied.
Committee
insiders told the South Asia Tribune even the Chairman
of the Defence Committee, Lt. Gen (Retd) Javed Ashraf Qazi was
not satisfied with the testimony of the PIA Chairman, Choudhry
Ahmed Saeed, who had been summoned on June 9.
“I
know that Bas….. has made a lot of money in PIA, but I cannot
hold him accountable as I am in the Government Party,” Lt.
Gen. Qazi was overheard talking to his friends about Chairman
Ahmed Saeed.
The
Senate hearing was held after the Opposition raised the PIA scandals
inside the National Assembly during the Question Hour on June
7 and the Government was forced to admit that US$100 million had
been over spent on the purchase of B-777 Boeings from US as against
European Airbus planes.
Details
of the Committee meeting were provided to SA Tribune by
Opposition PPP Senator Farhatullah Babar who said the PIA Chairman
had admitted that the B-777 had been leased by PIA from a Cayman
Islands off shore company, Taxila Inc, and had not been purchased
as claimed by PIA earlier.
“Initially
the PIA bosses were very reluctant to commit that the price paid
by M/s Taxila to Boeing/Bank for the rent of the aircrafts was
the same which the PIA paid to M/s Taxila for this purpose and
said they will make relevant documents available. The PIA agreed
to provide documents, but the Master Lease Agreement between PIA
and Taxila Inc has not been provided.
Senator
Babar referred to the Senate press release which said that the
Standing Committee had expressed satisfaction over the purchase
of Boeing 777 and the replacement of business class seats of the
Airbus.
“On
learning about it later in the evening we immediately responded
and contradicted the Government version. I also wrote a letter
to the Chairman of the Committee protesting against the one sided
statement about the proceedings of the Committee.”
“We
have also filed a reference with the NAB against PIA to reinforce
our view that we do not endorse the one sided Government version,”
Senator Babar said.
In
the Committee meeting, he said, the Opposition raised the following
concerns:
- Contrary to the claim made on the floor of National Assembly
that PIA owned the Boeings, it is now admitted by the PIA management
that these have actually been leased from M/s Taxila Ltd.
- Since the “Master Lease Agreement” between PIA and
M/s Taxila has not been made public, it is a matter of concern
whether PIA pays more to M/s Taxila than what M/s Taxila pays
to the Boeing Company for the aircrafts. Transparency demands
that the “Master Leased Agreement” be made public
and the concerns that “M/s Taxila” pays far less to
Boeing that what PIA pays to “M/s Taxila” for the
lease of same aircraft be addressed.
- The Choice of Boeing 777 is also stated to be influenced by
the consideration of loan guarantees arranged by Boeing which
the Airbus reportedly could not arrange.
- It is a matter of concern because it means that PIA’s
financial managers were unable to arrange a loan package even
though the Government of Pakistan provides the sovereign guarantee.
This concern needs to be addressed.
- Whether it was an appropriate financial and administrative decision
to spend nearly 200 million dollars more on Boeing purchase compared
with the Airbus, needs to be addressed.
- Why millions of dollars were being spent on replacing seats
in the Airbus needs to be addressed. The example of other airlines
fitting the same seats in their aircrafts does not address the
issue why the PIA should discard the existing seats and replace
it with new ones.
- Eleven Fokker Aircrafts have been sold for a little over $100,000
each. It is a matter of concern why the PIA did not carry out
any comparative analysis to establish that selling the Fokkers
to the buyer as has been done was more profitable than selling
it as scrap, as was done in the past.
Earlier in the National Assembly
the Defence Ministry conceded on June 7 in writing that 8 new
Boeing 777 purchased by PIA had cost the taxpayers a massive $100
million more than price of similar planes offered by Airbus Industries.
The Ministry also confirmed that the Planning Commission had raised
serious objections on the deal.
Parliamentary Secretary for Defence
Major Tanveer Hussain told the Parliament the Boeings were purchased
keeping many factors in view. He said the average price of recently
purchased Boeing 777 family aircraft is around $139 million and
the total project cost of these aircraft, including spares, facilities,
dries and other miscellaneous charges is $1.458 billion.
The National Assembly question turned
into a debate when several MNAs criticized the PIA deal.
PPP
MP, Naveed Qamar wondered how could the Government of Pakistan
purchase 8 Boeings at an additional price of $100 million when
another Airbus company with same facilities was ready to give
those 8 planes much cheaper.
MMA leader Liaqat Baloch further
grilled the Defence Ministry and demanded a full debate so that
all aspects of the deal could be discussed. He said the international
media was also speculating and filing reports that some ministers/powerful
personalities of the government were involved in the financial
scam.
At
one stage the Prime Minister had to intervene and stop the Parliamentary
Secretary for Defence as he was giving irrelevant details. Mr.
Jamali asked the Secretary to sit down instead of creating more
confusion and giving the chance to the Opposition benches to further
grill the Government.
More
charges of corruption in the PIA were published by Daily Dawn
on June 7. A letter published by the newspaper said PIA had been
a victim of abuse by various governments but some of these problems
have continued to date in spite of tall claims made by the (Ahmed
Saeed) management.
“Whole batches of cabin crew
have allegedly been appointed based on the whims of the top management.
The management's misuse of the so-called discretionary powers
has caused much frustration among employees, who allege that there
has been a serious breach of the existing rules in some of the
recent appointments, postings and promotions,” the letter
said.
“In a few cases, those who
took the voluntary golden handshake have rejoined without any
loss of emoluments, as if they had never left the airline. Some
such employees were out of the airline for more than two to three
years and had received their pensions, commutation, provident
fund and other benefits.
“Although
rules do not allow these irregularities, they fall under the much-abused
term of discretionary powers of the management and the defence
ministry. It is such irregularities that have dented the credibility
of PIA and eroded the morale of its employees. “
