PIAC signed employment contract without advertisement: Parliamentary panel told

A parliamentary panel was informed on Wednesday that Pakistan International Airlines Corporation (PIAC) management signed an employment contract with a cook for an annual payment of Rs 4.430 million without advertisement. The sub-committee of Public Accounts Committee (PAC) headed by Syed Naveed Qamar examined the audit report of Aviation Division for 2003-04.
Secretary CAA Muhammad Ali Gardezi acknowledged that it was an anomaly as three cooks were hired without proper advertisement in press by former chairman PIA, Ahmed Saeed. He said he did not know why the cook was taken as consultant. Audit report pointed out that PIA management appointed a consultant in flight kitchen in November 2002 at a package of salaries and allowances at Rs 180,000 per month salary net, Rs 25,000 per month as hours rent, Rs 35,000 per month conveyance charges, Rs 2,000 mobile phone expenses and all facilities equivalent to GM and Rs 150,000 per month for payment of two chefs with facilities of Group VI officers.
The audit report showing reservations stated that PIA flight kitchen, despite the fact that a GM and four mangers with a large number of skilled and experiences officers, staff have been working effectively since long, hired the services of a consultant. Thus, the service of a consultant in the presence of experienced and skilled staff was unnecessary and a burden on the shoulders of PIA.
In addition, no substantial improvement either in terms of monetary benefits or in terms of quality in food was achieved during the period the consultant remained associated with the corporation. In another case, the CAA could not recover outstanding dues on account of landing and housing charges, route navigation charges, foreign travel tax, embarkation fee and power supply charges from various airliners for the period 2002-03.
Secretary said the efforts to recover the amount from PIA and US Air Force have been under way. PIA owes Rs 35 billion to CAA. Whereas, Ministry of Foreign Affairs was approached for the recovery from US Airforce. The matter was also included in the working paper of Prime Minister's recent visit to the US.
The audit further pointed out that an amount of Rs 57.216 million was recoverable from the airlines, specifically Rs 41.048 million from non-active airlines, the chances of recoveries of which were remote and it would be ultimately a loss to public exchequer. Thus, the interest of the corporation was not safeguarded while dealing business with the non IATA airlines.
These airlines include Libyan Airlines, Tajik Airlines, Somali, Iraqi Airways, Zambia Airways and Pan American which discontinued their flight operations in Pakistan long time ago. The committee directed the ministry to take the matter to PIA board and keep pursuing it through the diplomatic channel. The committee expressed its displeasure over non-compliance of PAC's previous directives in cases related to Ministry of Housing and Works and deferred the agenda of the ministry. The PAC also took a strong notice of delay in appointment of Secretary Ministry of Information, Broadcasting and National Heritage. The committee asked the Information minister to appoint a new secretary as soon as possible.
Reviewing the audit report of Ministry of Commerce for year 2003-04, the committee directed the ministry to set up an inquiry committee to probe the case of non-settlement of dues of Rs 6.157 million realisable from M/s Dadabhoy Insurance Company Limited. It was noted during the course of audit of Pakistan Reinsurance Company Limited (PRCL) that Rs 6.157 million was due form M/s Dadabhoy Insurance Company since 1999 on account of acceptance, treaty and retrocession accounts. According to the management of PRCL, the insurance company also submitted claims in respect of yellow cabs, amounting to Rs 5.050 million against PRCL. The matter has been in the court of law.
The audit also raised objection on imprudent investment of Rs 200 million in Chakwal Cement Company by State Life Insurance Corporation of Pakistan (SLIC) in 1995. As under section LINO 1972 investment shall only be made as per rules formed by the federal government. Therefore, SLIC was not authorised to make portfolio investments in unlisted companies. The committee termed the investment in the cement company a serious irregularity and gave ten days to secretary Commerce to take an action against the accused as per inquiry report finalised by the ministry.