Shady PIA Airbus deal cost exchequer Rs478 million

The retired plane was sold to a German museum during the tenure of the previous CEO

Riazul Haq February 19, 2018

ISLAMABAD: The Pakistan International Airlines (PIA) Airbus A-310 sold off to a German museum through a shady deal by the airline’s former chief executive officer and procurement and logistics director has cost government exchequer Rs478 million.

The aircraft was discussed in parliamentary sessions and by standing committees and the Public Accounts Committee, which in its last meeting forwarded the case to the National Accountability Bureau.

Despite all efforts of these bodies, PIA management kept avoiding sharing the exact details of the deal, which included only a director and then-CEO Bernd Hildenbrand. Parliamentarians dubbed the deal in “gross violation” of rules and regulations of such sales.

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According to a show-cause notice sent to then-procurement and logistics director Imran Akhtar Khan by the PIA management, he has been responsible for “misrepresenting the facts by presenting inconclusive information.”

According to the notice, the deal caused loss of Rs478, which was the written down value (WDV) of the aircraft as of November 2016 including its engines and four auxiliary power units.

The decision was taken after the government announced a new aviation policy under which any aircraft that was over 25 years old would be grounded after December 31, 2016. Interestingly, according to an aviation expert, PIA still has four A-310s grounded at Karachi airport and nobody is deciding on what to do with those aeroplanes.

The notice states that Khan was not to be involved in the negotiation, finalisation and signing of the charter agreement for the aircraft besides hiding the fact that it would be used by a production house for the shooting of the film ‘Entebbe’ in the United Kingdom and Malta.

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The movie – which will be released in March – is based on the actual Operation Entebbe, an Israeli commando operation which occurred in Uganda in 1976, which was not mentioned in the agreement, and consideration for approval of the relevant official authorities was not carried out “before using [a plane belonging to] the national flag carrier for a pro-Israel movie.”

Currently, the aircraft is parked in a German museum, where even the latter has sought a parking fee from PIA, which is now in a fix over the situation because the rest of the payment has yet to be made.

Similarly, the notice states that despite the unusual agreement, the agreement clauses were not followed and about 50% of the amount was to be paid in advance and the rest at the time when the aircraft landed at the airport in Malta on November 25, 2016.

“However, the lump sum amount was received with a delay of 21 days after the issue was raised by media and Senator Mandviwalla in a standing committee on December 15, 2016,” it said.

The director was also found finalising the deal prior to application of required rules and regulations and even before floating tenders. “The tender was smaller than the required size and was issued by yourself, while normal tenders are issued by the director or general manager for shipping and disposal,” the show cause reads.

Interestingly, the aircraft has been parked at Leipzig Airport since December 5, 2016, and the payment was not to be received in cash but rather was to be settled on account of marketing and support expenses for a newly-planned flight route passing through the same airport to New York.

The ruckus over the deal is likely to end as the standing committee on PIA looking into the matter will not meet again before the Senate elections.

However, during its last meeting, the special committee observed that PIA has to update the Senate Secretariat on the matter, even after it the committee becomes dysfunctional, including the proceedings against the director and CEO.


Sodomite | 6 years ago | Reply When is Air Blue going to take over PIA routes??
Sodomite | 6 years ago | Reply All crooks. We can't find 10 honest people in Pakistan??????????
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