Editor’s
Note: After our successful series of investigative articles
on PIA under the ousted Chairman Choudhry Ahmed Saeed, a new Chairman,
Tariq Kirmani of PSO, was appointed. We gave six months to Mr.
Kirmani to undo what Saeed had done and to put the airline back
on the right track. Now that period is almost over. With this
first story we begin our new series of investigations about PIA
under Mr Kirmani.
From Shoe
Maker to a Gas Guzzler, PIA Remains a Raped Orphan
By
M A Siddiqui
KARACHI,
October 8: Despite the change at the top, from a shoe maker to
a gas dealer, the cancer that hit Pakistan’s national airline,
PIA, has not been diagnosed. While General Musharraf’s nominee
robbed the airlines left right and center, PM Shaukat Aziz’s
man is not just stealing the coffin, he is raping the dead body
as well, as a popular proverb goes in Pakistan.
In
the six months that Tariq Kirmani, head of the country’s
largest oil company, the Pakistan State Oil (PSO), has run PIA,
not only the mistakes made by ousted Chairman, Choudhry Ahmed
Saeed, have been repeated, ratified and authenticated, Kirmani
has made blunders of his own.
Many insiders and experts agree that the way PIA is now being
run appears to be a pre-meditated plan to bring it down to the
status of a financial train wreck when it could be sold for ‘One
Dollar’ to an international client of Citibank, the employers
of Pakistan’s borrowed Prime Minister, waiting for his ‘elevation’
to join the World Bank.
And guess who is having the biggest laugh these days? Musharraf’s
crony Choudhry Ahmed Saeed. He goes about every evening reminding
Musharraf and his inner circle high spirited comrades of another
much used and abused proverb: ‘As you sow, so shall you
reap.’ Saeed’s desperate cries were answered by Musharraf
not by stopping Kirmani from raping the PIA, but by awarding Saeed
a national medal for his ‘meritorious services’ to
PIA.
Kirmani
joined the PIA in April this year and came from PSO, a petroleum
products wholesale and retail company, with absolutely no experience
whatsoever of aviation or airline business. His sole claim to
the PIA throne was his friendship with PM Shaukat Aziz who had
acquired the leverage to name the new PIA boss because Ahmed Saeed
and Musharraf had been so discredited it had become an embarrassment
for Musharraf to either continue with Saeed or name a replacement.
“Instead
of learning the aviation ropes, Kirmani did what he knew best:
Corporatize the set up. This meant that against all rules and
regulations all Directors of PIA were re-named Senior Vice Presidents,
as if renaming them would turn them into real experts,”
a former PIA executive told the South Asia Tribune.
Kirmani was known as the King
of PSO because he would rule like a king. No one was allowed on
the 9th Floor of the PSO building. Not even his senior most executives
unless they had an appointment or a meeting. But the King had
a lot of baggage, dirty baggage, which was either ignored by Shaukat
Aziz and Musharraf or they did not bother to do a security and
background check with relevant agencies and authorities.
This dirty baggage included a
long list of official investigations being conducted against Kirmani
and PSO on charges of corruption, misuse and misappropriation
of millions of dollars by none other than the National Accountability
Bureau (NAB) of General Musharraf in all the provinces.
A
list of these official probes, obtained by the South Asia
Tribune makes a sad reading. It reveals that PSO and Kirmani
were in deep trouble and Shaukat Aziz had tried to bail him out
by giving him the high profile job of PIA Chairman. Even now if
those official investigations are taken to their logical end,
Kirmani would stand convicted of many crimes, big and small. South
Asia Tribune will deal in full detail with these issues in
the upcoming stories in this series.
Click to view the list
As
late as January 2005, the NAB was seriously pursuing Kirmani.
Many of the previous investigations were either put on hold or
were pending clearance from the top to proceed. Most of them under
PM Shaukat Aziz and General Musharraf may not see their logical
end and may have to wait for the NAB under a new dispensation.
Click to View latest NAB letter
With
this background Kirmani started “revamping” the PIA
on Corporate lines. The first orders he issued were to carpet
the road which led to his office worth Rs 5.6 million. Although
Civil Aviation Authority (CAA) and not PIA is responsible for
road maintenance, Kirmani had no problem issuing the orders.
Then
came another proclamation from the new Emperor. All employees
of PIA, big or small, high or low, will have to use the back door
to enter the head office. Only the Chairman will use the front
door. Even that was not enough. Kirmani ordered that a new elevator
to his first floor office be installed and his car should be able
to drive right at the elevator door. That is right now being done
to make the entry of the king more royal. Millions are being spent
on the project.
To
keep the distance from his subordinates obvious, Kirmani ordered
the removal of all chairs from briefing rooms and now all the
executives have to stand in the morning meetings for hours. The
corporate face of the airline has quickly changed to the headquarter
of an intelligence agency.
Having
"corrected" his image and established himself as the
corporate boss, since all the Directors of PIA were now called
Vice Presidents, Kirmani went about the next hatchet job, of cutting
jobs in the name of saving expenses. Hundreds of old and new employees
have been ordered to be retired but only at the lower level because
these poor guys do not have connections in the top echelons of
power.
Even in this operation no management
or administrative skills were displayed. While jobs were cut to
save money, millions were being thrown away either because Kirmani
did not know what he was doing or he did not care.
One such example is of a Director
who is actually not a Director but who was pushed up by the previous
Chairman as a favor because he was a blue eyed boy.
Documents
obtained by the South Asia Tribune reveal the case of
Salman Javed, the General Manager promoted as Director General
Services on virtually the last official day in office by Choudhry
Ahmed Saeed. He was to stay on probation for six months before
he was to be confirmed in his new post as Director. The confirmation
would be due on October 14, 2005. View
appointment letter
Come
Kirmani. Somehow he did not like Salman’s promotion and
wanted to get rid of him. The most economical way would be not
to confirm him on the new job if he was not fit. But using his
‘excellent’ administrative skills, Kirmani ordered
on August 8, 2005 that Salman should be retired. Presumably the
retirement before confirmation meant that Salman was going out
as GM, his original designation. But no, he retires as Director
with full pay and benefits up to age of 60 which would cost PIA
close to Rs 13 million. Click to view
retirement order
“What
a great show of magnanimity. The amount which is being paid to
Salman could have kept at least 72 lower rank PIA employees, now
being sent home, on their jobs for a year,” a PIA financial
analyst said. “The case shows Kirmani has either no idea
of how to save money or the job cuts are meant to serve some other
agenda,” the analyst added.
In
another show of skill, or lack of it, Kirmani has not touched
the expensive flight engineers who have nothing to do after PIA
sold all its wide body planes. These 42 redundant engineers have
to be paid flying hours even if they don’t fly and the amount
comes to millions upon millions. If PIA were to fire these 42
engineers, almost 400 low level jobs could be saved. But Mr Kirmani
has not yet thought about it.
These were administrative matters
in which Kirmani was supposed and required to be an expert. How
about the real job of running the airline, aviation and aircraft?
Kirmani’s
decisions in the first six months are pathetic to the point of
being naive and stupid, says a former PIA MD.
“PIA
is throwing away all the planes gradually at token prices and
replacing these with the planes on wet lease. The terms on which
these planes have been leased are worse even compared to the terms
on which PIA sold its planes.”
Kirmani
has sold six A-300B4 planes while the 7th was scrapped. But before
the sale PIA spent so much money on these aircraft under the head
of maintenance, that the price obtained looked like peanuts. This
fact was revealed during the physical inspection of the aircraft
by the Senate Standing Committee on Defence and Defence Production.
According
to an estimate of the PIA engineering, total cost of maintenance
for A300B4 fleet was estimated to be $17.263 million. Therefore
the PIA management decided to sell the entire fleet of six aircraft
for $10.1 million but after it had done all the checks including
C-checks and base checks. PIA also replaced and installed new
equipment on the sold aircraft worth millions of dollars. Why
it was never understood.
The matter did not end there.
PIA has been providing the facility to part out the parts without
any cost to the buyers. In the open market, charges for parting
the aircraft are very high and in millions of dollars.
So there was something very fishy about the sale from the very
beginning. Why were so many favors being dumped on the buyers.
The buyer, MNG Airlines, attached many conditions with its offer
to buy the aircraft and all were accepted by PIA.
The
most intriguing was for PIA to take the same aircraft on lease
from the buyer. So PIA first sold them its duly refurbished planes
at throw away price and then leased the same on questionable and
highly profitable rates. Can any sane financial expert explain
these decisions taken by Kirmani?
For the last Hajj season, PIA
hired three aircraft at $3 million each. However, a PIA official
revealed that PIA has paid almost $15 million instead of $9 million.
Why, it is not yet clear, but something was again very fishy.
The point to note is that PIA
had hired the three aircraft in the presence of the A300B4 fleet.
Now that these six aircraft have been sold, it will have to hire
as many more to meet the Hajj season needs. That’s why,
the PIA management has already invited bids for three aircraft
immediately till November period before the commencement of the
Hajj season. The airline will also be looking for three more aircraft.
Why
such a great interest in leasing to the extent that fully airworthy
aircraft are sold to a company and then leased back from it, is
the million dollar question. Perhaps for Kirmani this is a good
business practice but for PIA and the country it may mean losses
of millions and billions instead of the promises made by Saeed
that his decisions would bring profits of billions.
When
the South Asia Tribune broke the story of Kirmani’s
appointment on April
1, 2005, we wrote: “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.”
“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.”
And when he was appointed, we wrote on April
17, 2005: “It would be unfortunate if Kirmani covers
up Saeed’s misdeeds or protects the corruption of his cronies,
just because exposing all this may embarrass General Musharraf
or his close friends. Even if some people have to be protected,
the rape which took place with PIA has to be exposed and corrected.
Otherwise replacing one yes-man with another would not mean a
turn around for the airline.”
It turns out that a shoe maker has been replaced by an oil dealer
and the airline has become the orphan, who is raped by the new
father every time he is adopted.
