PAC subcommittee censures CAA officials

Reviews audit objections for 2016-17

ISLAMABAD: Expressing dissatisfaction with the responses of Civil Aviation Authority (CAA) during the review of its audit objections, the convener of the subcommittee of the Public Accounts Committee (PAC) Syed Naveed Qamar censured CAA officials.

He also asked them to submit the copy of the audit report to the authorities. “The director general of CAA will be summoned to the next meeting if the audit report is not submitted by then,” he said.

Meanwhile, member of National Assembly (MNA) Hina Rabbani Khar maintained that the way CAA officials were presenting their answers was itself questionable.

The subcommittee deferred most of the audit objections pertaining to CAA while reviewing audit objections made in the CAA division annual report for 2016-17.

Khar noted that cancelling of PIA flights due to the inadequate number of passengers was a recurring feature. She said it would negatively affect the carrier’s reputation. “In addition, domestic flights from Lahore to Karachi have been returned back to Lahore twice owing to adverse weather conditions,” she added.

The meeting was also attended by PIA Chief Executive Officer (CEO) Air Marshall Arshad Malik. He informed the committee that the national carrier did not have a permanent chairman.

Upon this, the committee convener noted that the same post in the CAA was also vacant. Naveed Qamar also recommended the appointment of chairmen for the two organisations.

During the meeting, the audit officials informed the committee about the loss of Rs4.0736 billion to PIA due to flawed contract following the verdict of a British court against PIA. “As per the verdict, PIA was ordered to pay Rs4.0736 billion to the travel agents on account of commissions while a fine of Rs13.1 million was also imposed on PIA,” they said.

However, PIA officials insisted that they had not signed any contract with the travel agents at all. “PIA did not sign any such contract in 2005, while the verdict used International Air Traffic Association (IATA) and an Australian court’s judgment as its basis,” they claimed.

Upon this, the convener inquired how was the PIA operating in London if no contract had been signed. “Neither the PIA nor the audit officials have the contract that was referred to by the British court,” Qamar observed, while instructing audit officials to provide the contract cited by the British court. He also instructed PIA’s chief to personally review the contract in detail.

The audit officials told the subcommittee that PIA signed a contract with a US-based firm in 2004 according to which PIA could not work with any other entity. In addition, the company must be given a three-month notice before the end of contract.

“However, PIA terminated its contract with the company without notice, after which the company took the matter to the court,” PIA officials informed the committee. This resulted in a fine of $5.72 million on PIA, they said.

“The orders of the court will not be in your favor if you do not respect the contracts,” Qamar observed, while expressing surprise that an institution as large as PIA was unable to fulfil its contractual obligations and backing out of it without following due course.

The PIA officials told the subcommittee that the contract was bringing losses to PIA and an inquiry into the matter had been already initiated. The convener noted that the subcommittee would not admit any such inquiry that was carried out to save the department’s officials.

We could have avoided the loss if the company was given a three-month notice, Qamar said, while instructing the authorities to hold an impartial inquiry into the matter.