More than Rs 4.4 billion irregularities, embezzlements, unauthorised expenditures, non-recoveries and losses were pointed out in Pakistan International Airlines Corporation (PIAC) accounts, an audit report 2008-09 revealed. According to audit report, PIA has faced a loss of Rs 1438 million due to unauthorised and irregular expenditure on repair/overhaul of engines.
The management of the PIA got approval from Central Purchase Committee (CPC) for sending CF680C2 engines for repairs/overhaul to Koninkligke Luchtvaart Maatchappij (KLM) company in two years at $2 million per engine per annum at a total cost of $16 million. Contrary to the above, as many as 13 engines of A-310 aircraft were shopped out to KLM, the Royal Dutch Airlines during the year 2005-06 for repair at the cost of $39.58 million, resulting into an excess expenditures of $23,583,453 equivalent to Rs 1,438.59 million without budget and approval by ignoring the lower offer of another company.
The report maintained that there was in-house facility of repair, overhaul/modification of CF6-80C2 engines, but all these engines were shopped out to KLM at higher rates at the cost of the corporation. The report says that the matter was also brought to the notice of Defence Ministry on May 30, 2009 but no reply was received.
The report says that the PIA was facing loss of Rs 1166.8 million due to irregular appointments over and above the approved strength. The PIA management appointed 618 employees involving heavy payment of Rs 1,166.8 million during financial year 2006.
The PIA has also faced a loss of Rs 574.114 million due to surplus aircraft parts. In PIAC Logistic Division Karachi, a large number of spare parts of various aircraft valuing Rs 574.114 million were lying un-used since long and management declared them surplus without following the prescribed procedure of PIAC.
The PIA also faced the loss of Rs 127.414 million due to acceptance of bogus cheques and non-receipt of cargo sales. The PIA also lost of Rs 101.748 million due to undue repair expenditure on the aircraft components under warranty. Similarly, spare parts of Rs 20.804 million were lying unused for last 20 years. Similarly, there are many cases in which the PIA faced millions of rupees loss.