PAC body told PIA accord termination with foreign cos causes huge loss

Islamabad : The Subcommittee of the Public Accounts Committee was informed on Wednesday that the termination of agreement of the Pakistan International Airlines (PIA) with foreign companies caused losses in millions of rupees.

The PAC Subcommittee was held with the chair of its convener Syed Naveed Qamar in which the audit paras related to the Aviation Division for the year 2016-17 were examined.

The PAC committee convener took a strong notice of not providing the details of the agreement to the committee and directed that the copies of the agreement to be provided to the department of the Auditor General of Pakistan till the next meeting, and if it was not provided then the committee would summon the DG Civil Aviation Authority.

PAC Member Hina Rabbani Khar observed that the way the officials of the Civil Aviation Authority was giving the reply it raises many questions. She remarked that it was observed that the domestic flights were cancelled after the flight did not have the required strength of the passangers, and it was never happens in any other company. “Twice happens that the flights between Lahore and Karachi retuned back Lahore due to bad weather,” she remarked.

Chief Executive Officer of PIA Air Marshall Arshad Malik said that the PIA did not have the permanent Chairman.

Convener of the committee Syed Naveed Qamar remarked that it was strange that even the Civil Aviation Authority also not have a chairman and how the departments could be run with head.

While examining the audit para regarding the loss of PIA of Rs4.735 billion to PIA due to agreements with the travel agents, the Audit officials told the subcommittee of PAC that the British court has given the verdict against the PIA and according to decision of the court Rs4.7 were paid to travelling agents and besides it, the British court also imposed penalty of Rs13 million .

The PIA officials told the subcommittee of the PAC that the PIA did not make any agreement with the travel agents in 2005, but the British Court gave a decision against the PIA on the basis of decision of the Australian courts.

Convener of the subcommittee questioned that if there was no agreement then how the PIA was doing business in London and even the agreement which was mentioned in the court decision neither with the PIA nor with the Audit. “First show us the agreement and the CEO of the PIA should also examine the agreements of the PIA,” he observed.

The Audit official told the subcommittee that PIA has entered into agreement with the American company in 2004 and under this agreement, the PIA cannot do business with any other company and three-month notice required to terminate the agreement. “But the PIA terminate the agreement with the company without giving three month notice and on which the company went to the court and the court had ordered the PIA to pay a penalty of $5.72 million,” the audit official told the committee.

Convener of the PAC Subcommittee Syed Naveed Qamar said it was strange that the PIA violates the agreement and if they violate then the court decision will come against them.

The PIA officials told the committee that the PIA was suffering losses due to agreement and the inquiry was also conducted in this issue.

Syed Naveed Qamar said no one accept this kind of inquiry which were made only to save the officials of the department. “If the three-month notice served to the company then the losses could be avoided,” he remarked.

The committee ordered for the fresh independent inquiry into the matter.

Meanwhile, in another meeting of the Subcommittee with the chair of its convener Raja Pervez Ashraf, the officials of the department of the Auditor General of Pakistan raised an objection to Intellectual Property Organisation for running without any rules.

The audit officials raised the question that in the absence of the rules, how the department of Intellectual Property Organisation spending the expenditures.

The Subcommittee of the PAC directed the Intellectual Property Organisation to formulate its rules within four weeks of time.

The audit officials were of the view that the rules and regulation of the Intellectual Property rights were ended with the expiry of the ordinance in 2007.

The audit officials told the Committee that the EXPO centre in Lahore was running in losses since it was established and till June 2018, the losses have reached over Rs1 billion.