Civil Aviation Authority audit: Aircraft purchase deal draws auditor’s ire

The auditor-general finds violation of procurement rules in the transaction.

QUETTA:

In what appears to be free will of the competent authorities or perhaps some tacit motive, the Civil Aviation Authority (CAA) floated tenders for one category of the transport aircraft in 2007, but purchased an entirely different class of planes much inferior in category, spending millions of dollars from the national exchequer.

The logistics department of the CAA on January 7, 2007,gave tenders for two FAR Part25 transport turbo fan aircraft but later purchased FAR-23normal category aircraft on September 3, the same year, at the cost of $15.3 million without going through open bidding for the changed category.

Among the series of irregularities the office of the auditor-general of Pakistan detected during a random audit of CAA accounts, it has raised serious objections over the above anomaly saying that the acceptance of aircraft other than the tender specification was a gross violation of official rules for procurement.

According to the audit report for 2010-2011, which will be presented before Parliament shortly, the office of the AGP took up the issue with CAA high-ups in December 2009 and received an interesting reply:  “The case of FAR-23 versus FAR-25 was discussed with the Ministry of Defence which allowed the purchase of FAR-23 in order to avoid a closure of operations by international airlines.” In its reply, the CAA did not mention with whom and in what capacity the defence ministry approved the changed purchase deed.

The AGP office rejected the response and said that the reply was unacceptable because the purchase of FAR-23 aircraft was in violation of tender conditions and section 23 (3) of the Public Procurement Rules.

The Log Book of the already underused aircraft showed that they were operational till2007 before the delivery of the new aircraft on an immediate basis contrary to the claims of the CAA.

The AGP once again raised the issue with CAA with new findings. On its insistence, a meeting of the Departmental Accounts Committee took place in January this year and held the objections of the AGP as valid.

The DAC admitted that the public procurement rules were violated in the purchase and decided to refer the matter to the Public Accounts Committee in the National Assembly.

The AGP also unearthed another irregularity in the purchase of two Flight Inspection aircraft at a cost of Rs1, 075million in 2007 which were procured without the approval of ECNEC – the forum whose approval is mandatory for any purchases of more than Rs500million.

CAA prepared a PC-1 of Rs930million involving payments in100 per cent foreign exchange for the procurement of two flight inspection aircraft and went ahead with the project after getting approval from the CAA board by passing the Ecnec.

The AGP further said that the cost of the aircraft provided in the PC-1 was not authenticated on the basis of market survey and cost analysis of different types of aircraft manufactured by different aviation industries of the world.

In the end, the CAA purchased the two aircraft atRs1.07 billion and that too at a time when it already had the Beech King-200 aircraft used for the same purpose and was in the best working condition.