Gem institute on the brink of bankruptcy

Trading between the govt and private sector, GGIP loses its shine.

PESHAWAR: The Gems and Gemological Institute of Pakistan (GGIP) is on the brink of bankruptcy due to mismanagements and will likely be forced to cease operations in a few months if not bailed out.

The institute was established in October 2001 under a public-private partnership and a budget of Rs40.90 million was approved from the Exports Development Fund.

The initial arrangement was to provide funds for the acquisition of land and construction of buildings, the cost which was to be borne by a private sector entity, All Pakistan Commercial Exporters Association (APCEA). APCEA, however, established the GGIP in a rented government building by depositing the fund in a fixed deposit account at a bank and using monthly interest earned to pay for operational expenses including the rent and salaries of the staff.

Until August 2010, the system worked well and 2,200 students were trained by the GGIP, which offered a three-month basic course.

“The arrangement was a good one as the chairman of the APCEA also held the top seat of the institute, thus a strict check and balance system was imposed by APCEA,” said former chairman of GGIP Atif Rashid Khwaja, adding that the Ministry of Commerce interfered in the affairs of the institute and took the flag over from the APCEA.

The commerce ministry withdrew the funds from the bank, consequently within a few months time the organisation was in a financial crunch, Khwaja said, adding that then APCEA was called to take over the charge when about Rs33m of the funds allocated to the organisation remained.

“I took charge in 2010 and remained chairman for a year. APCEA had vowed to run the institute successfully but no one gave use the real freedom we wanted as All Pakistan Trade Development Authority installed its own chairman and we were given a back seat,” said the former chairman Khwaja.



“I wrote several letters to the Secretary of Commerce but no one listened so I quit as a protest,” he added.

Another former chairman of APCEA and the GGIP Shafee Muhammad told The Express Tribune that the closure of GGIP will be a great loss to the gems sector of the country.

When contacted the sitting chairman of GGIP, Abdul Karim Hashmi declined to comment on the matter.

The meeting of the boards of directors has not taken place in the past two years so the trail of use of funds is unknown.

Published in The Express Tribune, December 13^th, 2012.