Sold at throwaway prices: PAC directs state-owned firms to abandon vehicle policy
OGDCL sells two and a half dozen cars for a mere Rs1,000 each
As many as 171 vehicles were given to the officers of OGDCL under its buy-back policy on an average price of just Rs74,269 per vehicle. PHOTO: REUTERS
ISLAMABAD:
Parliament’s accountability arm on Tuesday directed all public sector enterprises to shun their policies of giving vehicles at throwaway prices to their officers after disclosure that Oil and Gas Development Company (OGDC) sold 325 cars at an average price of Rs198,000 per vehicle.
This included two and a half dozen six-year-old Toyota and Suzuki cars, which were given at a ridiculous price of Rs1,000 per car.
Headed by Syed Khursheed Shah, Public Accounts Committee (PAC) remained lenient towards the OGDCL management. Under the 2005 car policy, the vehicles were given at a notional price and most of these were handed over at just 10% of the original price of the cars, admitted the Acting Managing Director of OGDCL, Mohammad Rafi.
The government has a 75% stake in OGDC – the oil and gas exploration giant. As many as 171 vehicles were given to the officers of OGDCL under its buy-back policy on an average price of just Rs74,269 per vehicle.
Another 154 vehicles were given on retirement to senior officers at an average price of Rs338,000, showed the documents tabled by OGDCL in the PAC meeting.
Turning down the recommendation of the PAC members to hand over the matter to either the National Accountability Bureau or Federal Investigation Agency for a probe, the PAC chairman directed that all public sector companies should modify their car policies.
The orders will be applicable to OGDCL, National Bank of Pakistan, Sui Southern Gas Company Limited, Sui Northern Gas Pipelines Limited, Pakistan Petroleum Limited and such other public sector companies established under the Companies Ordinance or under special pieces of legislation.
PAC asked OGDCL to report back after revising its ‘outlandish policy’. The acting chief of OGDCL was ready to amend the policy to discontinue the practice of giving vehicles at just Rs1,000 but defended the policy of doling out vehicles at 10% of the original cost after five years of purchase.
The prevailing policy was in line with corporate sector practices, said Rafi. He admitted that he was not aware of the market price of these vehicles.
Mian Abdul Manan, the PML-N’s member National Assembly, argued against the practice. “I bought a Toyota 2009 model at a price of Rs1 million and sold it at Rs900,000 after using it for four years.”
Ironically, OGDCL sold 2008 and 2009 models of 1300cc Toyota at a price of just Rs1,000. According to the company, the value of vehicles depreciates to zero after five-year use.
While the PAC members argued against the policy and called for its scrapping, the chairman did not see eye to eye with them.
The government vehicles – coming straight out of the taxpayers’ pockets – are misused and sold at throwaway prices. This practice is not only restricted to public sector enterprises, all federal ministries and divisions also indulge in this practice.
Top bureaucrats with basic pay scales of 20 to 22 are not only availing up to Rs97,000 monthly car allowances but are also using official vehicles without any restrictions.
Interestingly, the bureaucrats are paying only 5% income tax on the car allowance instead of paying the standard income tax.
Oil theft
PAC also took up the issue of alleged theft of oil from the oil fields. Secretary Petroleum Arshad Mirza admitted “there were firm-up allegations of theft of oil from the fields” but the ministry has not yet established that fact.
He said that an investigation was under way to ascertain the facts, which will be completed in the next two weeks.
Published in The Express Tribune, February 11th, 2015.
Parliament’s accountability arm on Tuesday directed all public sector enterprises to shun their policies of giving vehicles at throwaway prices to their officers after disclosure that Oil and Gas Development Company (OGDC) sold 325 cars at an average price of Rs198,000 per vehicle.
This included two and a half dozen six-year-old Toyota and Suzuki cars, which were given at a ridiculous price of Rs1,000 per car.
Headed by Syed Khursheed Shah, Public Accounts Committee (PAC) remained lenient towards the OGDCL management. Under the 2005 car policy, the vehicles were given at a notional price and most of these were handed over at just 10% of the original price of the cars, admitted the Acting Managing Director of OGDCL, Mohammad Rafi.
The government has a 75% stake in OGDC – the oil and gas exploration giant. As many as 171 vehicles were given to the officers of OGDCL under its buy-back policy on an average price of just Rs74,269 per vehicle.
Another 154 vehicles were given on retirement to senior officers at an average price of Rs338,000, showed the documents tabled by OGDCL in the PAC meeting.
Turning down the recommendation of the PAC members to hand over the matter to either the National Accountability Bureau or Federal Investigation Agency for a probe, the PAC chairman directed that all public sector companies should modify their car policies.
The orders will be applicable to OGDCL, National Bank of Pakistan, Sui Southern Gas Company Limited, Sui Northern Gas Pipelines Limited, Pakistan Petroleum Limited and such other public sector companies established under the Companies Ordinance or under special pieces of legislation.
PAC asked OGDCL to report back after revising its ‘outlandish policy’. The acting chief of OGDCL was ready to amend the policy to discontinue the practice of giving vehicles at just Rs1,000 but defended the policy of doling out vehicles at 10% of the original cost after five years of purchase.
The prevailing policy was in line with corporate sector practices, said Rafi. He admitted that he was not aware of the market price of these vehicles.
Mian Abdul Manan, the PML-N’s member National Assembly, argued against the practice. “I bought a Toyota 2009 model at a price of Rs1 million and sold it at Rs900,000 after using it for four years.”
Ironically, OGDCL sold 2008 and 2009 models of 1300cc Toyota at a price of just Rs1,000. According to the company, the value of vehicles depreciates to zero after five-year use.
While the PAC members argued against the policy and called for its scrapping, the chairman did not see eye to eye with them.
The government vehicles – coming straight out of the taxpayers’ pockets – are misused and sold at throwaway prices. This practice is not only restricted to public sector enterprises, all federal ministries and divisions also indulge in this practice.
Top bureaucrats with basic pay scales of 20 to 22 are not only availing up to Rs97,000 monthly car allowances but are also using official vehicles without any restrictions.
Interestingly, the bureaucrats are paying only 5% income tax on the car allowance instead of paying the standard income tax.
Oil theft
PAC also took up the issue of alleged theft of oil from the oil fields. Secretary Petroleum Arshad Mirza admitted “there were firm-up allegations of theft of oil from the fields” but the ministry has not yet established that fact.
He said that an investigation was under way to ascertain the facts, which will be completed in the next two weeks.
Published in The Express Tribune, February 11th, 2015.