New Islamabad airport: PAC orders probe into Rs6b airport contract

Asks NAB to determine responsibility for removing ex-PIA CEO’s name from ECL

ISLAMABAD: The Public Accounts Committee (PAC) decided on Tuesday to launch a parliamentary investigation after finding ‘irregularities’ in the award of contract for the under-construction New Islamabad International Airport by the Civil Aviation Authority (CAA).

The revelations were made during a meeting of the PAC that was examining an audit para related to the construction of the airport. It was the first high-profile case of ‘irregularities’ surfaced during the scrutiny of the latest audit reports of the PML-N government’s third year in power.

It was pointed out that the CAA awarded the contract worth Rs6 billion to a firm on the instructions of a former aide to prime minister on aviation at 232% higher rates.



“The then CAA director-general annulled the first bidding process on the instructions of the then special assistant to prime minister on aviation Capt (retd) Shujaat Azeem,” the director-general of audit informed the PAC.

He said the CAA had invited fresh bids from the same three parties that participated in the bidding process held earlier for the installation of boarding bridges at the New Islamabad International Airport and awarded the contract to M/s ADELTE/HRL which was 232% higher than the original approved price of Rs2.5 billion.

“The whole process of annulling the original bids and re-inviting them from the same parties was dubious,” said the director-general.

He said the special assistant on aviation issued the directives that financial bids of the bidder should not be opened.

After hearing the argument, PAC Chairman Syed Khursheed Shah formed a committee to dig out details behind the award of contract. PPP Senator Sherry Rehman will chair the three-member committee and give its report within a month.



“The Rs6 billion contract cost was one-fourth more than the engineers’ estimates,” the director-general informed the PAC.

The New Islamabad International Airport is under construction and its total cost has jumped from Rs36 billion to Rs81 billion. It is believed that the cost may go further up in the future.

The PAC also decided to seek the assistance of the Pakistan Engineering Council (PEC) and the Public Procurement Regulatory Authority (PPRA) in another case of ‘irregular award of contract’ for the installation of a baggage handling system at the airport at a cost of Rs4.5 billion.

The audit objected that the CAA gave the contract at Rs4.5 billion despite the bidder quoted the lowest price of Rs3.9 billion.

“It is a unique case in my career where the bid price was Rs3.9 billion while the CAA gave the work order at Rs4.5 billion,” said Shah.

Aviation Secretary Irfan Elahi admitted that the procedural irregularity had been committed in the case. But the PAC was of the view that the issue was more than the simple procedural irregularity.

Moreover, the bidder got the contract despite it was not registered with the PEC. Overall, the PAC expressed its unhappiness with working of the aviation division and at various occasions snubbed the aviation secretary for defending corrupt practices in the authority.



Missing aircraft

The PAC directed the National Accountability Bureau (NAB) to investigate as to who removed the name of former acting chief executive officer of the Pakistan International Airlines Bernd Hildenbrand from the Exit Control List (ECL).

He was accused of selling PIA’s A-310 aircraft to a German company in a dubious manner.

The name of the former acting CEO had been placed on the ECL after a number of charges of corruption against him, including the one of selling a PIA plane to a museum in Germany. He had gone on leave initially, but was removed from the post later on.

The aviation secretary said the plane had been chartered by a British company to shoot a movie in Malta following which the PIA staff flew the aircraft to Germany.

He said the former CEO had struck a deal to sell the plane at a price of 57,000 euros to a German firm before even inviting open bids.

“It was an unjust deal that indicated that someone got undue financial benefit,” said Shah.

The secretory disclosed that in order to build pressure on Pakistan, the German firm was demanding parking charges from PIA. “The company claims since Pakistan has not closed the deal, it was entitled to parking charges,” said Elahi.