ISLAMABAD: A parliamentary panel has recommended the government to pursue vigorously the sale of an airbus of the national flag carrier to a German firm at a very low price in violation of PPRA Rules in December 2016.
The sub-committee of the Special Committee of the Senate on Performance of the PIA submitted its report to the main committee pertaining to probe into the circumstances under which the alleged sale of PIA airbus A-310 to a German firm took place in violation of PPRA Rules.
The committee endorsed the report submitted to it by convener of the sub-committee Senator Farhatullah Babar in which it recommended the government to bring back the former CEO of PIA Bernd Hilldenbrand, a German national, who approved the controversial sale.
In its recommendations, the committee stated that it is strange that, as claimed, the matter of the sale of aircraft was confined to only two officers namely the then CEO Hilldenbrand and ex-Director (Procurement and Logistics) Air Commodore, Imran Mukhtar Khan.
It stated that the PIA management cannot escape a measure of responsibility, even though it took some positive actions after the matter became public.
The committee noted that the actions taken such as terminating contract of the CEO and reverting the director (P&L) to his parent ministry seem too little too late, adding that the former was allowed to go abroad despite his name being on the ECL while the show cause notice issued to the latter was not pursued.
It observed that the matter should have been reported to the FIA and the NAB soon after its seriousness had become obvious instead of waiting for media/parliamentary attention and the Public Accounts Committee (PAC) of the National Assembly directing that the matter be referred to the NAB.
“As the matter has since been referred to the NAB, there is a need to diligently pursue inquiry/investigations and keep the Senate Secretariat regularly informed about the progress made,” it stated in the recommendations.
It recommended that two firm and clearly defined steps need to be taken: firstly, the then CEO Bernd Hildenbrand who was allowed to leave the country for a month despite his name being on the ECL should be brought back. The Foreign Office should be asked to vigorously pursue the matter with the German embassy on whose intercession the limited one-time waiver from the ECL was reportedly granted. Secondly, the show cause notice issued to the then director (P&L) be pursued to logical conclusion and the Senate Secretariat be regularly kept informed of the progress in both.
The PIA in its initial report to the committee stated that in October 2016, its acting CEO Bernd met with Leipzig Airport authorities to discuss launching of New York flights via Leipzig.
Concurrently a Leipzig Museum Authority expressed interest in buying AP-BEQ to place it as the Leipzig Museum in PIA livery at a price of Euros 47,500 for the structure.
However, no commitment has been given to the Leipzig Airport authorities till date as the case was moved to obtain approval of Board of Directors (BOD). They were, however, instructed to send their offer against the open tender which would be published.
Hence another tender was floated for sale of 04 aircraft including AP-BEQ on 9-11-2016 for bid opening on 12-12-16, which was later opened in the presence of media on 13-12-16 due to Eid Milad-un-Nabi holiday.
In the meantime a London based company, M/s Aviaction Ltd approached to lease one A-310 aircraft for a movie to be shot at Malta. The contents of the movie were not conveyed to the PIA. AP-BEQ was due for a c-check on 25-10-16 and could not fly without a waiver after 27-11-16 due to structure reaching its life.
Therefore, a waiver was obtained from the CAA to fly without passenger’s load, to Malta where it participated in the film shooting in Air France Livery. After shooting the aircraft was painted back to PTA livery and aircraft was flown to Leipzig. The PIA received euros 210,000 for this charter. The aircraft was flown to Leipzig from Malta as the flying time is only one hour and 35 minutes and it would save the cost of fuel and over flying charges as compared to flying back to Karachi.
The PIA in its report further stated that on 13-12-16, tenders were opened in the presence of media and only bid received was from Leipzig authorities with another company M/s Firefly which submitted the bid for the purchase of engines and APUs.
The evaluation process is underway to ascertain the admissibility of the only received bid. The PIA has also mentioned that internal approval of the sale of AP-BEQ was obtained from acting CEO before the actual publishing the tender to facilitate processing the case for approval of BOD, which was duly processed on 24-11-16.
The total amount earned by this aircraft is euros 257,000 which includes the charter service payment of euros 210,000. No bid was received for the rest of three A-310 aircraft which will be tendered again.
The committee, in its findings, pointed out that neither the director (P&L) nor the acting CEO had the authority to negotiate, finalize and move the aircraft for sale at Leipzig. It was found to be a violation of deregistration, retirement rules and regulations to be followed before selling the aircraft, it added.