Army’s expanding footprint: NLC allowed to bid for state-owned construction firm
In what appears to be a setback to the efforts to limit the military’s footprint in the economy, the government on Thursday allowed the National Logistics Cell (NLC) – the army’s commercial logistics arm – to bid for a state-owned construction company, in violation of the NLC charter.
The decision was taken at a meeting of the NLC’s board of directors, chaired by Finance Minister Abdul Hafeez Shaikh, who has been actively involved for the last several months in narrowing the scope of the NLC’s activities and bring them in line with the company’s legal mandate.
The move comes less than three weeks after the NLC management was found to have been illegally engaged in trading on the Karachi Stock Exchange, an activity which resulted in the company losing Rs1.8 billion between 2004 and 2008. The parliamentary Public Accounts Committee (PAC) has directed the National Accountability Bureau to begin legal proceedings against three retired generals and two civilians for their alleged involvement in the case.
The NLC had requested permission to buy the overseas assets of the National Power Construction Company, a state-owned company that is currently being privatised. The government is seeking to sell 88% of its stake in the firm, currently wholly state-owned, as well as management control.
A participant of the meeting told The Express Tribune that some members of the board raised concerns that the NLC was already violating its core mission and was even engaged in the construction business.
The board also approved the NLC budget for the financial year 2012. For 2011, the NLC’s net income was Rs3.9 billion.
NLC was set up in 1978 to ease congestion at the Karachi Port and soon evolved into one of the most critical logistics companies in the country. The company is responsible for transporting half of the nation’s oil, up to 76,000 barrels per day.
Yet in recent years, the company has begun expanding its operations. NLC is now engaged in construction activities across Pakistan, typically for the military but sometimes also for civilian infrastructure, such as roads and bridges.
Published in The Express Tribune, July 22nd, 2011.
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@Jeddy Ideally speaking that should be the way u suggested but when all the organs of state are functioning properly. One way is that we start blaming army the way, Mrs ayesha siddique does out of No where. More rational approach would be that we think and talk rationally , keeping in view the ground realities of Pakistan.
When the army is into real estate it is only natural that it will eventually be in construction. The armed forces should be working to defend the country - leave real estate and construction to civilian professionals. It is as if democracy never came to Pakistan - the strings of power are still in the hands of the armed forces.
Correction: FWO built the Karakoram Highway not NLC :)