PIA's Ahmed
Saeed Finally Being Booted Out, Back to Manufacturing Boots
By
M T Butt & M A Siddiqui
ISLAMABAD/KARACHI,
April 1: This
is not an April Fool’s gig. General Pervez Musharraf and
Prime Minister Shaukat Aziz have finally decided to appoint a
new Chairman for Pakistan’s troubled national airline, PIA,
as out-going and out of luck Chairman, Choudhry Ahmed Saeed, continues
to make last ditch efforts to get an extension for his contract
ending April 14, 2005.
The
new man coming in is Mr Tariq Kirmani, Managing Director of Pakistan
State Oil, (Left) the largest corporate entity in the country,
which is shortly to be privatized and most likely to be handed
over to Fauji Foundation to keep it under the wings of the Pakistan
Army.
Kirmani
is a friend of PM Shaukat Aziz and was recently appointed as the
President of the Pakistan Hockey Federation, replacing General
Mohammed Aziz, the famous Kargil General retired by Musharraf
few months back in a shake up of top Army commanders.
“Kirmani’s
appointment has been agreed between Musharraf and Shaukat Aziz,”
a source in the PM’s office disclosed. “But Ahmed
Saeed is still desperately trying to get an extension, using three
retired Army colonels, Ahsan, Mahmood and Mudassar, who have been
the major beneficiaries of Saeed’s extravagant policies.”
These
retired colonels were inducted and given powers beyond their capacity
while none of them had the experience and training to run the
sensitive departments they were given. The result was a mess in
everything they did and now they need Saeed to keep the cover.
Publicly
claiming that he was not interested any more in the job, Ahmed
Saeed has been lobbying hard through media interviews and his
gang of three army colonels to impress upon General Musharraf
and his close aides that only he could turn the airline around.
To
lobby for his lost cause, Saeed had initially scheduled a detailed
briefing for the Prime Minister today, March 31, 2005 in Islamabad,
but that date was extended to April 8, 2005 as Saeed felt that
his friends were not succeeding in getting the proper message
to General Musharraf and he was not responding favorably.
And
to add public pressure for his extension, Saeed gave a full length
interview to “Blue Chip” a corporate magazine, making
all kinds of tall and mostly conflicting claims about his intentions,
his performance and the future of the airline.
Yet
the free media has been reporting Saeed’s failure with relish
and even conservative newspapers like ‘Dawn’
have joined the exposure of Saeed’s follies and the negative
impact of his decisions, taken almost single handedly as the Chairman
and Managing Director of PIA, a position which militates against
the PIAC Act which clearly states that the Chairman and MD would
be two separate persons and the MD would be appointed in consultation
with the Chairman.
In
one week at least four very damaging news items have appeared
in the mainstream Pakistani media, including Dawn, The News
and Daily Ummat, highlighting Saeed’s failures and
focusing on the bad image and costly damage the airline had suffered.
Now
when Musharraf and Aziz have agreed on a replacement for Saeed,
the April 8 briefing is again being pushed further to give Saeed
more time for lobbying.
A
credible source in Islamabad said Saeed and his men were asking
for April 30 as the briefing date for the PM, two weeks after
Saeed is supposed to retire with the expiration of his contract
on April 14, 2005.
“This
is a clever ploy as he will get a whole month to approach General
Musharraf, although Shaukat Aziz has almost put his foot down
and convinced Musharraf that Saeed must go, if PIA was to get
back its financial health under control,” sources close
to the PM told the South Asia Tribune.
As
a first step of his skillful maneuvering, Ahmed Saeed recently
transferred all powers of the Managing Director to Farooq Shah,
a recently promoted Deputy MD, who has now been authorized to
handle all PIA affairs.
This
again is a clever move to cover up for the mismanagement and wrong
decisions, fudging of figures and corruption in purchases amounting
to billions of dollars. A man who has been a partner in all this
corruption with Saeed would be the best suited to protect his
own and Saeed’s interests.
Knowing
that his tenure was coming to an end, Saeed has been trying his
best to provide corporate and legal cover to his major blunders.
Minutes
of a recent meeting of the PIA top brass, chaired by Ahmed Saeed
in Lahore on March 7, 2005, obtained by the South Asia Tribune,
disclosed many such belated attempts to cover up his failed decisions.
Click to view minutes Page1 | Page2
| Page3 | Page4
| Page5
The
minutes reveal the details of the briefing which was to be given
to the Prime Minister today, but have since been put off to April
8 and may even be extended further as a tactical ploy. The points
to be discussed included the latest status of the sale of New
York’s Roosevelt Hotel, the critical Reservation systems,
the IT system and PIA’s engineering department.
But
the most revealing point was a proposal by the PIA Chairman to
raise another Rs 20 billion as loans from the market, provided
the Government of Pakistan gave guarantees.
Click to View Page
This
revelation makes all the claims and figures of profits made by
Chairman Saeed in the last thre years doubtful because if now
he is asking for another Rs 20 billion in loans, that too under
Government guarantees, it means all his projections and statistics
were manipulated and misleading.
PM
Shaukat Aziz was unlikely to agree to provide such government
guarantees as PIA had already been given a Rs 20 billion grant
two years ago and now Saeed claims he needs another Rs 20 billion.
Shaukat Aziz had already turned down other requests by Saeed to
provide funds to buy replacement aircraft for the Fokker Fleet.
Another
major admission of failure and an attempt to cover it up, has
been revealed on Page 3 of the Minutes
wherein it is stated that two PIA Directors had now told the Chairman
that US-based company SABRE was unable to handle the new Revenue
Accounting System QUASAR. This admission shows that Ahmed Saeed
had forced the decision without making proper enquiries and homework
and had even spent more than 10 million dollars for preparing
a whole building to be allotted to SABRE for the Accounting System.
After
all the expenses and all the wastage of time, now PIA is trying
to wriggle out of the SABRE deal and the top Directors are being
used by Saeed to provide the justification to do so. But who is
going to account for the millions of dollars lost by such a huge
wrong decision is not clear.
Page
4 of the Minutes also reveals a massive deception carried
out by Chairman Saeed in the PIA budget. The last para says an
“extra” Fuel Cost of Rs 500 million “over the
budget” will be needed in the first quarter of 2005. The
budget was finalized towards the end of 2004 and there was no
mention of this extra cost, just to keep expenses low and show
profits. Once that was done, within a few weeks an extra Rs 500
million is being added to the budget. This is manipulation of
figures at its worst, or best.
While
the Minutes reveal so many of the wronged decisions, Chairman
Saeed himself has been speaking about his tenure, his successes
and failures and has been indirectly lobbying for an extension
of his contract.
In
his interview with “Blue Chip” he makes so many
contradictory and confusing statements, it baffles the readers.
Either Saeed thinks every body else is a moron or he considers
himself a super intelligent person who can get away with anything
he says or does.
To
quote an example in his interview he talks about making the largest
ever corporate purchase in Pakistan’s history --- that of
B-777 aircraft from US for US$1.5 billion although he admits that
at that time the finances of PIA were fragile. Click
for the Magazine quote
Saeed
claims that after September 11 terrorist attacks, “free
planes were readily available, but we as a Management decided
that we already have old planes and there is no point in buying
more old planes, even if they are for free. We took a decision
to go in for brand new planes and that is how these 777s came
in. For the last decade there was no induction of any new planes
in PIA. In the year 2004, we have inducted nine wide-bodies planes
– three new 777s and six Airbus 310s.” Click
to View Quote
This
statement raises huge questions about maturity of decisions. If
finances of PIA were fragile and “free planes” were
available, who decided to spend the money PIA did not have on
buying brand new aircraft and why? Saeed elsewhere claims in his
interview that PIA’s Engineering Department was now approved
by EAFA and aircraft repaired and maintained by PIA were acceptable
all over the world. So if this is the case, why could PIA not
get some free aircraft and repair them to run them on domestic
and international routes?
But
the last part of Saeed’s statement, saying that PIA had
inducted nine wide-bodies planes, three new 777s and six Airbus
310s, contradicts his earlier claim in the same paragraph, that
new planes were needed and old ones were not acceptable, even
if available for free. What he has done, as against what he is
saying, is that in 2004 he bought six "old" Airbus 310s
and only 3 "new" 777s. Is this what he means by inducting
new aircraft? And if he was not ready to take old planes for free,
why pay for six old 310s is beyond understanding. This is just
a matter of misleading the authorities and Generals by deceptive
statements.
Not
only that the 310s were old, there have been serious maintenance
problems and warnings have been issued by the Civil Aviation Authority
to PIA but Chairman Saeed has been using his influence to get
provisional Airworthiness Certificates to keep them flying.
In
fact serious problems were also encountered in the new 777s as
six of these planes’ landing gear have so far caught fire
when landing. Out of these six accidents, four took place at Manchester
Airport alone while one at Lahore and another at Toronto. The
latest accident took place on March 1, 2005 at Manchester on Flight
PK-789.
In
a detailed report, the CAA said it had been established that brake
assemblies were not taken out as per the specifications of the
manufacturers. Moreover, the chief engineers were not cautious
to use grease and solvent for the service as per the specifications.
The most pinching matter was that despite the occurrence of six
identical fire incidents, the PIA was not ready to accept its
failure.
The
CAA report also said: "Although six fire incidents have taken
place on these aircraft but it was observed that involvement of
quality control staff was highly inadequate. Had the quality control
staff critically gone through the whole procedure at the early
stage at least half of these fire incidents could have been avoided."
The
CAA also asked the PIA management to take action against Chief
Engineer Quality Services for his failure to carry out timely
investigation of such serious incidents. But all those responsible
are enjoying life without any fear of punitive action, thanks
to protection given by Saeed.
The
funniest part of the desperate claims made by Chairman Ahmed Saeed
has been about the Engineering Department and its potential. In
his “Blue Chip” interview, Saeed makes that unbelievable,
almost utopian, claim that his Engineering Department could earn
“from $15 billion to $20 billion in one year.” Click
to view quote
This
looks like a major typo but the mistake has been repeated again
and again, as if Saeed was actually saying that billions could
be earned by repairing aircraft of other airlines. If so why is
he asking for Rs 20 billion as loans from the Pakistani market.
The
most incriminating evidence of Saeed and his family benefiting
from PIA comes from both the Minutes of the March 7 meeting and
Saeed’s interview to “Blue Chip” Magazine. In
Para-2 on Page-3 where SABRE is discussed, two companies are
mentioned by Saeed’s Director of IT, a former car show room
manager who was brought in PIA at an exorbitant salary of Rs 450,000
per month, as replacements. These companies are: Messrs Mercotor
of Emirates and Lufthansa. Likewise in Para-3 on the same
page it has been stated that a company “Aeroexchange”
would submit a proposal to the Engineering Department. Click
to view Minutes
Who
is behind these companies and why these companies are being given
such a preferential treatment, is not explained. But South
Asia Tribune has learnt on good authority that two companies
mentioned above are fully or partly owned by sons of Chairman
Ahmed Saeed. Hence they are to be rewarded without any open bidding
or competition.
Saeed
himself admitted at the end of his Blue Chip interview that his
two sons Arif and Omar, an Oxford and the other a Harvard graduate,
were “venturing into IT projects”. Click
to view quote
But
the way he praised an ex-car show room manager, now his IT guru,
was significant because the same IT guru was now going to award
IT projects to his two sons.
Given
all this mess and personal involvement of Chairman Saeed, it is
hard to believe his claim that he was not interested in an extension
of his contract as PIA Chairman.
Yet
the new Chairman will have a daunting task at hand to deal with
all the Saeed’s men sprawling all over the airline. He will
have to clean up the management, bring back all the qualified
and experienced professionals who have been shunted out on personal
reasons and start picking up the pieces faced with a task of managing
an airline burdened with huge debts and unable to generate revenues
to meet its costs.
Saeed
had abolished the purchase and stores department altogether so
that he could himself handle everything. He had authorized his
hand picked directors to manipulate figures and present the stats
to mislead the government. He had run the company as he runs his
shoe company.
The
new Chairman will have to run the airline like an airline not
like an oil company, where he comes from, or like a shoe factory
where the outgoing chairman will go.
