AGP detects Rs41b graft in depts

2017-18 audit report points out glaring loopholes

ISLAMABAD: The Auditor General of Pakistan has detected Rs41 billion irregularities in the departments working under Aviation Division.

The revelation was made in the 2017-18 audit report according to which PIA reported irregularities of Rs17.11 billion, Pakistan Civil Aviation (Rs24 billion) and the Airport Security Force committed financial irregularities of Rs240 million.

The AGP has made recommendations to initiate action against those responsible for the financial irregularities and causing losses to the national exchequer.

As per the report, PIA faced billions of rupees in losses due to mismanagement adding to its total deficit of Rs350 billion.

“Due to incompetence of PIA officers, the national flag carrier airline suffered a loss of Rs17 billion,” says the audit report, revealing that the administration had appointed 250 management trainee officers against 20 vacant posts due to which PIA had to bear an additional burden of Rs1.24 billion.



The report also states that the airline started a PIA Premium Service in which it incurred expenditures of Rs5.21 billion against income of Rs2.33 billion, contributing a huge loss of Rs3 billion.

In addition, the aircraft and other parts worth more than Rs5 billion were rendered useless due to poor administration by PIA’s engineering department.

Similarly, a loss of Rs800 million was incurred due to aircraft that were obtained on lease for the Hajj operation, while the airline had failed to submit Rs2.75 billion in federal excise duties and Rs165 million in income taxes, increasing the liabilities of PIA.

On the other hand, the top executives of the organisation — including former German CEO Hildon Brand, chief legal officer and chief technical officers were given unreasonable emoluments through Rs40 million illegal tax rebates.

Likewise, the approval for the grant of Rs67.6 million for 21 PIA employees in grade IV to grade VII was illegally given. The airline also failed to ensure recovery of Rs200 million from government institutions and Rs280 million from sales agents, cargo operators and other commercial organisations while compensation of Rs30 million was paid against loss of parcels and other luggage items of the passengers.

As per the audit report, the Civil Aviation Authority [CAA] reported financial irregularities to the tune of Rs23 billion during the last fiscal year.

Due to lags in the completion of projects, revenues of the CAA decreased, amounting to Rs9.67 billion.

In addition, highly expensive equipment and material procured for development of a passenger terminal at the Islamabad International Airport caused a loss of Rs6.5 billion to the CAA.

Similarly, the recovery of Rs2 billion on account of licence, fare and electricity charges on different airports under CAA’s control remains pending while financial irregularities amounting to Rs1.21 billion have been reported at Quetta and Bacha Khan airports.

The report also states that land for Mansehra airport was purchased without carrying out a proper feasibility study first while machinery worth Rs1.14 billion was procured for mega projects without taking the approval of ECNEC.

As per the audit report, the CAA saw a rise of 35% in its overall revenues while its assets increased by 7.5% as compared to the previous fiscal year.

The auditor general in his recommendations has asked the CAA administration to take notice of its financial irregularities.
Published in The Express Tribune, January 7^th, 2019.