Rs 1bn financial irregularities found in CAA accounts

[Abbas Ali]

PAC orders action against those responsible

ISLAMABAD: The Public Accounts Committee (PAC) taking notice of Rs 1 billion losses to the exchequer on account of financial irregularities, additional payments, fraud and false agreements in the Civil Aviation Authority (CAA) has ordered strict action against those responsible.

The committee, which met here on Thursday under the chairmanship of Malik Allah Yar, scrutinised the financial irregularities during year 2000-1 in the CAA.

The committee was told that the AGP had identified 1,042.893 million financial irregularities in the CAA and the authority had failed to recover Rs 20.158 million from Walton Lahore Plant Production Department. The CAA in its response told that the entire amount had been recovered, which could be verified from the AGP office.

Secretary Defence Tariq Waseem Ghazi told that CAA had to recover Rs 2.5 billion from PIA on various accounts and PIA had agreed to pay up Rs 1 billion while recovering the rest of the amount, the authority set up a sub-committee under the chairmanship of vice air chief. The committee would present a report in this regard to the board.

The PAC directed that the matter be wrapped up in two months and report be presented to the committee. It also took notice of the non-payment by advertising agency of TV artists Asif Raza Mir and Uzma Gillani and said that recovery in this regard should be made at the earliest.

The officials told that Asif Raza Mir had gone to Canada and the case was with the Sindh High Court. The case was decided in favour of the CAA but the decision was not implemented. “We have now served notice to Asif Raza Mir through our high commissioner.

The PAC also expressed resentment over non-recovery of outstanding dues amounting to Rs 37.968 million from various airlines and issued directives that the recovery process be expedited.

CAA officials informed that recovery to the tune of Rs 79 million have to be made from Bhoja Airlines, Rs 40 million from Raji Airlines, Rs 20 million from Safe Air, Rs 3.78 million from Hajveri Airlines and million of rupees from certain diplomatic missions.

All these airlines have closed down their business and some have filed cases courts. The committee directed the cases be contested. The auditor general raised objection that director Jinnah Terminal allowed 25 percent rebate illegally to Aurgas advertising for installing various boards and this way huge loss amounting to Rs 9 million caused to the national exchequer. Defence secretary acknowledged it was grave mistake. This contract should have been re-entered.

He assured that such mistake would not be repeated in future. Action will be taken whosoever is found involved in this irregularity. He stressed that certain rules need to be amended so that they are implemented easily.

The chairman committee said the rules and regulations, which are being considered draconian be amended. CAA officials told that the departmental action has been initiated against the officer found involved in awarding wrong contract to Aurgas.

Director Quaid-e-Azam International Airport Karachi signed an agreement with Messers Seasa food private limited for operating McDonald's restaurant. As per agreement Messers Seasa was to pay Rs 30.939 million to CAA within 30 years.

However, certain provisions of this accord were not implemented and due to which a loss to the tune of Rs 137.238 million was inflicted on the national kitty. The committee directed that action be taken against the responsible officials. The civil aviation authority had to suffer loss amounting to Rs 746.157 million in another agreement with this company.

The committee directed that the authority should improve its financial system and initiate action against the officials found responsible in the financial irregularities.

Besides Hafiz Hussain Ahmad, Abdul Ghafoor Haidri, Kanwar Khalid Younis, Safdar Shakir, Roy Mansib Ali, Riaz Fatiana, Aasia Azeem, Ali Akbar Wains, Sardar Ashiq Gopan, Auditor General of Pakistan Yunis Khan and senior officials of Defence Ministry, Civil Aviation Authority and PIA also attended the meeting.

Source: The News

[Abbas Ali]

PAC’s note of warning to CAA

ISLAMABAD, July 20: Public Accounts Committee (PAC) on Thursday condoned the Civil Aviation Authority (CAA) losses to the tune of millions of rupees with a mild note of warning that the department should be careful and transparent in its future transactions.

Secretary Defence Lt-Gen (retired) Tariq Wasim Ghazi defended CAA saying that the irregularities reported in the audit paras were “judgmental matters and not procedural violations.” In certain other instances PAC asked CAA to expedite the recoveries.

Chairman PAC Malik Allahyar while going through the audit paras observed that whenever an agreement is done it should be transparent and no lacunas should be left so as to give rise to confusion afterwards.

He further said that all transactions should be above board and the officers should be confident that there is no element of doubt whatsoever in the deal.

Mr Allahyar said if there were any laws that were not conducive to routine business and those that were being described by the officials as draconian should be amended.

The PAC was told that project-director New Terminal Complex Lahore Airport made payment for some extra items at pro-rata basis without prior approval of competent authority resulting in excess payment of Rs2.006 million and $0.079 million.

Similarly, in another audit para it was pointed that project director New Terminal Lahore made payment for excess quantities of various items of work than provided in the bill of quantity without the prior approval of competent authority. Deviation from the bill of quantity resulted in over payment of Rs69.614 million and $1.806 million.

In both instances CAA was asked to get post-facto approval from the competent authority for the settlement of paras.

Another audit observation showed that Airport Manager Multan unauthorisedly established a welfare canteen in the commercial zone of the airport. The space rent was not deposited by ASF and the negligence resulted in non-recovery of Rs0.449 million. The irregularity was condoned as PAC was informed that the canteen has been closed.

In a similar case, the director airport Karachi granted rebate to a licencee of welfare canteen on agreed rate of licence fee without approval of competent authority resulting in loss of Rs1.253 million.

The audit noted that 25 per cent discount was given in tender notice and all bidders offered bids with 25 per cent subsidised rates for CAA employees.

Award of further rebate after award of contract, it said, was unjustified. A board of inquiry held in this regard established that neither licencee signed any licence agreement nor provided food at subsidised rates to CAA employees.

Moreover, the director airport Karachi granted exemption in utility charges without provision in agreement to the licencee of the welfare canteen. This resulted in loss of another Rs0.469 million.

As the PAC condoned these irregularities observing that concessions were not properly managed director general CAA told the meeting that welfare canteens have been closed.

Director Jinnah Terminal Karachi incurred a loss of Rs8.969 million by allowing a 25 per cent rebate to a licencee of advertising in airport premises on the plea that 5 less sites were handed over to the licencee for display. 120 sites were agreed, but only 115 could be given because the remaining had already been given to another advertiser.

The audit was of the view that the rebate should have been proportionate to the number of less sites given to the licencee. Secretary defence conceded that wrong had been done and the documents of defence ministry admit the losses due to mismanagement of the official. The PAC decided to settle the audit para.

Loss of Rs5.052 million was reported from Lahore Airport because of non-awarding of contract at re-tendered rates. Certain PAC members had doubts over the issue, but this too was settled. PAC directed CAA to expedite recovery of Rs4.015 million from M/s Blazon Advertising. Sindh High Court had issued decree in favour of CAA.

Auditors present at the meeting opined that this default occurred because of laxity of CAA as agreement clauses provided six monthly advance payment by the licencee, which was not enforced.

However, CAA officials contended that there were certain disputes which held up the payment. CAA was also asked to take steps for recovery of Rs37.968 million from airlines that had closed operations.

Regarding outstanding dues of PIA, it was decided that the matter should be resolved in a couple of months.

Source: DAWN

[SaadSaeed]

"A mild warning for loosing a billion Rs" ?