Transparency International Pakistan has expressed concern over the 'couldn't care less attitude' of Pakistan International Airlines in responding to Transparency International Pakistan letters highlighting violations of Public Procurement Rules 2004 and United Nations Convention against Corruption (UNCAC).
Forced by the situation, Transparency International Pakistan Adviser Syed Adil Gilani sent a letter on November 5 to Lieutenant General Syed Athar Ali (Retd) mentioning allegations of violations of PPR 2004 in procurement of gifts during Hajj 2010 and procurement of two aircraft on wet lease for Hajj 2011 operations, and violation of United Nations Convention against Corruption (UNCAC) Article 16, which reads: "bribery of foreign public officials and officials of public international organisations" in procurement of gifts valued at over SR 337,100 for the purpose of bribing Saudi officials. UNCAC was ratified by Pakistan on August 11, 2007.
Copies of the letter have been sent for appropriate action to: Chairman of Public Accounts Committee, Defence Minister, NAB Chairman, Auditor General of Pakistan, Registrar of Supreme Court of Pakistan, and Managing Director of Public Procurement Regulatory Authority (PPRA).
Transparency International Pakistan referred to its letter sent to PIA Managing Director on October 16, 2011 on violation of UNCAC Article 16, in procurement of gifts valued at over Rs 10 million for the purpose of bribing Saudi officials, which has not been responded by PIA. PPRA has also asked for comprehensive report from PIA MD vide its letter of October 19, 2011 under the power vested to PPRA through section 5 (2) (i) of section Public Procurement Ordinance 2002. "Failure of PIA to respond to PPRA as well as Transparency International Pakistan raises serious doubts on management of PIA and conforms to establish that these allegations are correct," Adil said in his letter.
Transparency International Pakistan had received a complaint in which the complainant had sent copies of PIA's own admission that these procurements of SR 337,100 were made as give-away gifts, with the approval of PIA Director Marketing and CFO. PIA had also admitted that these gifts were also given to offset extra flight PK 7412 sponsored by Rehman Malik which landed in Jeddah on November 11, 2010, resulting in a fine of SR 200,000, as PIA had operated the flight after the deadline against the request of Embassy of Pakistan vide their letter No PoI-II/28/2010.
These alleged violations of bribing were committed by PIA management on the recommendations of PIA Manager of September 10 and September 11, 2010 to bribe officials and staff of Saudi authorities' viz Customs, General Authority of Civil Aviation (GACA), PPNDFC, NHS, and Immigration. It was also alleged by the complainant that many invoices were fake, and many purchases were made much before the funds were released by PIA.
Another violation, reported to Transparency International Pakistan by another complainant, is about the procurement on wet lease two aircraft by PIA for Hajj operations in violation of Public Procurement Rules 2004 Hajj in 2010. It was reported that PIA had invoked Rule No 42 (c) Director Contracting, under emergency for Hajj Operations. Transparency International Pakistan, contesting this argument, said that according to Rule No 2 (g) Hajj Operations as well as Umra Operations in Ramazan are regular and routine annual special service of PIA since its inception in 1950s.
2 (g)"emergency" means natural calamities, disasters, accidents, war and operational emergency which may give rise to abnormal situation requiring prompt and immediate action to limit or avoid damage to person, property or the environment.
Provided that the procuring agencies shall specify appropriate fora vested with necessary authority to declare an emergency; "Kindly confirm whether Ministry of Defence or Cabinet has declared Hajj operations 2011 as "Emergency" or not," the Transparency International Pakistan asked. The Agreement Signed for Boeing 747 with Hellenic Imperial Airways, Greece, on September 29, 2011, was especially for Hajj flights as per Article 5.6, but these planes have reportedly never been used for Hajj Operations, as they were not approved by GACA of Saudi Government.
PIA has to pay guaranteed 400 hours at $6500/hr ie $2.6 million for each plane and total advance payment of $2.25 million at start of Hajj Operations (within 15 days, and payable $1.2 million ) total minimum cost $3.35 million , which were never used for Hajj operations.
PIA therefore paid RPP rental, $5.2 million without using the planes for the Hajj Operations, and violated the PPRA Ordinance and Public Procurement Rules 2004, Adil said. It has also been alleged by the complainant that out of total planned 305 Hajj Flights, PIA had to cancel 42 Hajj flights for non-availability of planes and 76 flights were delayed.
These allegations, if determined true by Ministry of Defence, may result in application of Rule No 7, (Integrity Pact" on suppliers, and fine of ten times of $5.2 million, ie $52 million from suppliers, in addition to action under NAO 1999 by NAB. This act is also violation of UNCAC Article 16. "Bribery of foreign public officials and officials of public international organisations" which says that:
---- Each State Party shall adopt such legislative and other measures as may be necessary to establish as a criminal offence, when committed intentionally, the promise, offering or giving to a foreign public official or an official of a public international organisation, directly or indirectly, of an undue advantage, for the official himself or herself or another person or entity, in order that the official act or refrain from acting in the exercise of his or her official duties, in order to obtain or retain business or other undue advantage in relation to the conduct of international business.
---- Each State Party shall consider adopting such legislative and other measures as may be necessary to establish as a criminal offence, when committed intentionally, the solicitation or acceptance by a foreign public official or an official of a public international organisation, directly or indirectly, of an undue advantage, for the official himself or herself or another person or entity, in order that the official act or refrain from acting in the exercise of his or her official duties.
Adil has requested Secretary Defence, who is also one of the directors of PIA, to check points raised by Transparency International Pakistan and if the allegations of violations are correct, take action against the officers responsible for these serious acts, which not only may have caused loss to exchequer of SR 337,000 and $5.2 million but also may cause serious diplomatic issues between Pakistan and Saudi Arabia the most friendly country of Pakistan, on issues of PIA levelling allegations of corruption on Saudi Government officials/staff of General Authority of Civil Aviation (GACA), PPMDC and Immigration and Customs.
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