PAC puts off decision on ad in US magazine

State-owned firms ran advertisement valuing Rs17m under political pressure

ISLAMABAD:

The Public Accounts Committee (PAC), led by Syed Khursheed Shah, has turned a blind eye to the award of a Rs17-million advertisement business to an American magazine by state-run companies under political pressure in a bid to save the skin of two former cabinet colleagues.

The Auditor General of Pakistan (AGP) had pointed out that five public sector enterprises (PSEs) made irregular expenditures amounting to €140,000 or Rs17 million on an advertisement in an American journal, Foreign Affairs. The Ministry of Petroleum and Natural Resources had also admitted that the PSEs gave business under political pressure.

The advertisement was given in 2009 through SML Strategic Media USA under political and bureaucratic pressure, according to a written response from  Ministry of Petroleum.

Instead of taking a decision, PAC Chairman Shah, who is associated with the Pakistan Peoples Party (PPP), on Tuesday put off the matter until the next meeting, raising doubts among many about the parliamentary accountability system.

Read: Under-review: An insight into the current Public Accounts Committee

In the meeting, PAC took up Rs44 billion worth of irregularities in the Ministry of Petroleum and Natural Resources during fiscal year 2009-10. Syed Naveed Qamar of the PPP dealt with most of the audit objections.

He had held the portfolios of privatisation, petroleum, water and power, defence and finance during the five-year tenure of the PPP from 2008 to 2013.

According to the AGP office, Pakistan Petroleum Limited (PPL), Pak-Arab Refinery Limited, Pakistan State Oil, Oil and Gas Development Company and Sui Northern Gas Pipelines Limited (SNGPL) had funded the advertisement “under extraneous pressure of the federal minister of privatisation and federal minister of finance”.

In 2009, Qamar was the privatisation minister and Shaukat Tarin was the finance minister. Qamar was also present in the PAC meeting as a member of the committee and advised Shah on how to handle the audit objections.

The auditors said companies in the petroleum sector had nothing to do with the issues of foreign affairs and the advertisement was given in violation of the Public Procurement Regulatory Authority (PPRA) Rules of 2004.

In its written reply, the Ministry of Petroleum commented that the payment in euros to a US-based firm made the “deal suspicious”. The payment was made through the Bank of Cyprus, it added.

PSEs were asked to finance the advertisement in the magazine ahead of a scheduled visit of then prime minister to the US aimed at projecting a positive image of the country, said Qamar after the PAC meeting.

Dubious hiring

While using his discretionary powers, Shah did not take up for consideration the irregular hiring of 73 officers in PPL during 2009-10. However, Auditor General of Pakistan Rana Assad Amin opposed the decision, pleading it would set a bad precedent for other state-owned companies.

Read: Auditor general refuses to appear before Public Accounts Committee

UFG dispute

PAC also deferred a decision on another contentious issue of Unaccounted-for-Gas (UFG) losses.

In an objection, the auditors said gas utilities had reported higher-than-permissible limit losses in 2009-10, which caused a Rs2.9-billion loss to the companies. In the same year, the Oil and Gas Regulatory Authority eased the UFG limit for the companies, which the auditors said was not justifiable.

The issue of a realistic limit of UFG losses for SNGPL and Sui Southern Gas Company (SSGC) has remained unresolved. Petroleum Secretary Arshad Mirza pointed out that SNGPL’s line losses had alarmingly increased to 11.5% while the figure was about 12% for SSGC by the end of last fiscal year. The permissible UFG limit was 4.5%.

Published in The Express Tribune, September 30^th, 2015.

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