WASHINGTON DC, May 29, 2005 | ISSN: 1684-2057 | www.satribune.com

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Sacked PIA Chairman Ahmed Saeed meets General Musharraf to pressurize Kirmani

New PIA Chief Being Blackmailed by Ousted Chairman's Appointees

By M T Butt and M A Siddiqui

ISLAMABAD/KARACHI, May 29: Transparency International, the globally respected NGO fighting corruption, has confirmed, in writing, big time purchase frauds in Pakistan’s national airline, PIA, under the ousted Chairman Choudhry Ahmed Saeed.

Saeed, who was asked to resign by the Prime Minister on April 16, 2005 has, however, launched a concerted campaign, using his friends surrounding General Pervez Musharraf, to undermine the authority of his successor, Tariq Kirmani, ex-chief of Pakistan State Oil. A grim power struggle seems to be going on.

“You have taken over the reigns of a gigantic public sector company which has not very good perception on its procurement,” Secretary General of the Transparency International in Pakistan (TIP), Syed Adil Gilani, wrote to the new PIA Chairman in a letter on May 6, 2005. Click to read letter

“Transparency International Pakistan in September 2004 had timely warned Mr Ahmed Saeed on the violation of Public Procurement Rules 2004 in PIA tendering, but PIA continued non-transparent procurement,” the letter said, urging the new Chairman to sign a Memorandum of Understanding with TIP on “Integrity Pact” and “Transparent Procurement.”

This warning was contained in a letter TIP sent to Chairman Ahmed Saeed on September 24, 2004 which in detail stated how PIA was violating the Government Rules in procurement. It specifically referred to a Pre qualification Notice for Consultants/Consulting Firms for RCC Steel Structures, published in Daily Dawn of Karachi on Sept 24. TIP acted on the same day as the PIA Notice was published in Dawn, indicating the seriousness with which it viewed the corruption in PIA. Click to Read TIP Letter to Ahmed Saeed Page1 | Page2

The correspondence between TIP and PIA was quietly passed on to the South Asia Tribune by sources close to the new Chairman in what seemed to be a part of the on-going power struggle between the ousted man and the newly appointed Prime Minister’s friend.

These sources also revealed the seriousness of the power struggle saying Choudhry Ahmed Saeed was trying hard to ensure that all his key appointees, including the ex-Army Colonel posted on the all-sensitive position of Special Assistant to the Chairman, remain in their places and guard against any attempt to expose Saeed’s misdeeds.

Surprisingly Tariq Kirmani has not been able to move even a single key official of Saeed’s tenure although he has been in charge of PIA for almost six weeks, a long period for any new comer to get adjusted and start making his first moves to get a grip on the administration.

The two most important cronies Ahmed Saeed has left behind in PIA are Colonel Mahmood Ahmed, a former ISI officer who was Saeed’s Special Assistant and has been retained by Kirmani, at least so far, in the same position and Colonel Ahsan Siddiqui, Director of Airport Services, who was recently accused by a PIA air hostess of sexual harassment in the Supreme Court of Pakistan where she had taken her case of illegal termination of service. Saeed had ignored the charges against Col. Ahsan.

As part of his larger cover-up operation, Saeed had eased out the two top officials of his Administration, both Deputy Managing Directors, weeks before his own sacking.

Saeed’s campaign to keep a lid on his own deeds, through his trusted cronies in the Kirmani Administration has succeeded so far. As part of the campaign Saeed’s friends in the President’s House arranged a meeting of the ousted Chairman with General Pervez Musharraf and a lot of publicity was given to the meeting, including release of photographs, so that Kirmani could be pressurized not to dig into the mess Saeed had left, specially in finances, purchases and deals which could haunt Kirmani if he did not put the blame where it was due.

Kirmani’s start as the PIA Chief has not been very impressive and he appears to have been blackmailed by Saeed’s men into keeping a low profile and going slow.

Sources close to the new Chairman revealed to the South Asia Tribune that both these Colonels, Ahsan and Mahmood, have now started publicly claiming, while they are a little typsy in the evening, that they had secured their positions solidly and Kirmani could not touch them, even if he wanted to.

According to one such conversation, Mahmood told his friends he had collected a lot of material through his ISI sources on Kirmani. This material deals with how Kirmani was trying to induct his friends on top PIA positions. “I will not allow him to induct any of his trusted cronies,” this former ISI colonel bragged before his friends recently.

What he was referring to were two recent advertisements published in major newspapers for posts of Director, Human Resources and General Manager, Brand --- a position new to an airline though in an oil company which Kirmani ran before coming to PIA, brand was very important.

Col. Mahmood has been telling his friends that Kirmani had already selected the people he wanted to induct on these top positions and the advertisements in newspapers were just an eyewash and a formality to shut up watchdog organizations like the Transparency International or the inquisitive media.

“Kirmani has selected Zaheer Baig, his close friend, for the post of Director, Human Resources while for GM Brand, a lady named Marina has been chosen,” Colonel Mahmood has been claiming in his evening sessions with Saeed’s men.

According to Mahmood, Kirmani neither had PIA Board’s approval for these top posts nor he had followed the procedure because applications were invited directly by the Chairman’s office and were processed there, in violation of PIA rules.

Likewise Mahmood and Colonel Ahsan have been claiming that Kirmani was trying to outsource the PIA Flight Kitchen and Technical Ground Support (TGS) Services to companies of his friends and these were millions of dollars worth of contracts which would be closely scrutinized by Transparency International, if they were awarded in a non-transparent manner.

According to Mahmood, Kirmani had decided to hand over TGS to a Dubai-based businessman, Saleem Mandviwala, who also handled a Saudi contract for PIA recently. The Flight Kitchen, again a multi-million dollar facility owned by PIA at Karachi and Islamabad, was being handed over to the Deewan Group, owned by close friends of Kirmani.

These allegations being made almost publicly by Colonels Mahmood and Ahsan have yet to be proved but they are telling everyone that if Kirmani tried to touch them, they would expose the real deals behind these expected decisions by Kirmani.

Experts say these threats tantamount to blackmailing the new Chairman, but so far they are working.

Sources close to Kirmani say Colonel Mahmood was on a very weak wicket himself as in his own case PIA gave misleading and wrong information to the Parliament by stating that Mahmood was a graduate (a Bachelor of Arts) while in fact he just had intermediate level education. Click to See Recruitment Data provided to Parliament

“This is a test case for Kirmani as he has to prove that under his Administration wrong information about his own Special Assistant was not passed on to the National Assembly,” sources close to the Chairman said. “If Kirmani fails to nab Mahmood on this, he would be held accountable by the National Assembly committees now closely monitoring and scrutinizing PIA affairs,” the sources said.

These retired colonels were inducted and given powers beyond their capacity by Ahmed Saeed while none of them had the experience and training to run the sensitive departments they were given.

How Saeed is using his connections in Islamabad to cover up his scandals was evident from the manner in which General Musharraf’s friend and his one-time Information Minister, now Chairman of the Senate Standing Committee on Defence, Government party Senator Nisar Memon of IBM origin, on May 24 vetoed the findings of his own sub-committee and allowed the PIA management to proceed with the sale of six Airbus aircraft for $10.1 million, a decision originally taken by Saeed. If Memon had stopped the sale, fingers would have been raised on Saeed.

Nothing could be more blatant and non-transparent as Memon contemptuously rejected the findings of his own Senate sub-committee, comprising two members of the Government and one from the Opposition, set up on April 14, to probe the sale of the A300B4 type aircraft.

According to Daily Dawn, the Press was barred from the committee's meeting which provoked its opposition members to stage a token walkout. Two members of the sub-committee, senators Asif Jatoi and Rukhsana Zuberi, had raised serious questions about transparency in the sale.

In a note of dissent submitted to the standing committee, opposition Senators Farhatullah Babar and Rukhsana Zuberi, said: "The sale of six airworthy aircraft for a paltry sum of $10.1 million and leasing of aircraft at 2.2 times higher cost (of $22 million) is not sound judgment and seems to be based on other considerations."

The note said the sale of A300B4 aircraft should be dropped, as recommended by the sub-committee, in the national interest and in the interest of tax-payers.

"PIA failed to make a cogent and satisfactory case to sell the aircraft and questions about transparency and feasibility persist," said the dissenting senators.

However, an official handout issued by the Senate secretariat said the PIA management gave satisfactory replies to "most" of the questions raised by the sub-committee. It was a simple case of bull-dozing the Parliament and white-washing the sins of Ahmed Saeed, an Opposition source said.

As Nisar Memon covered up for Saeed in the Parliamentary Committee, inaction by Kirmani was evident on other fronts as well.

Sources in the PIA Headquarters in Karachi said one of the pet projects of Saeed, run by his IT chief, Nadeem Ikram, a business partner of Saeed’s son, valued at US$30 million, is still on, although no airline in the world employs this system for the purpose PIA is using it, ERP, as it is called.

“Mr. Kirmani doesn't know what type of mafia men he has inherited in PIA. Trust me he doesn't. The only way, he will get to know this is by using the mafia knowledge of some other guy(s) who used to be part of the gang. You know this is how FBI solves the mafia problems,” a former PIA executive told the South Asia Tribune.

The executive said Kirmani should "take over" the PIA in the real sense and work on an agenda which should include the following steps, on an emergency basis:

Stop all IT or otherwise capital intensive projects till Ministry of Defence audits are completed on each project.
Deploy experts to determine the business case justification behind these key projects and seek answers to the questions being raised:

a) Abacus NMC project

- How much is it costing PIA.
- What is the quantified benefit (realized in last 4 months).
- Who is running it, said to be the girl friend of a Deputy MD.

b) Sabre's revenue accounting Project

- How much did it cost.
- Why won't they let Sabre run it? May be then the real numbers will show up.
- What are they doing to make use of it.
- Why are they keen on not using any Revenue Accounting System.

c) SAP -ERP project

- Where is the business case.
- How much has been paid so far and to whom.
- Who signed this.

d) AIMS Crew system project

- Where is the business case.
- Nadeem Ikram declared this project a success when no one uses it.
- If this is a system then how come 70-80 staff are required to manipulate it.
- Why didn't they get a crew system from their existing vendor Sabre when Sabre apparently offered this for FOC.
- How much has been spent so far on this.

e) Route by Route analysis of every route that Saeed opened up in last 3 years

- Which airline in the world will fly a B-777 between Pakistan and Houston 2 times a year.
- What is the monthly lease payment on the aircraft.
- What is the operating cost for fuel, insurance, crew, station manpower, etc
- How many passengers they have flown in last 6 months. H
ow much did each passenger pay.

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