WASHINGTON DC, Nov 27, 2004 | ISSN: 1684-2057 | www.satribune.com

The First Book based on Articles and Forum Discussions of South Asia Tribune has been published in Pakistan. It is a compilation of articles written for the SAT by Dr. Zafar Altaf, former Federal Secretary and Ex-Chairman of Pakistan Cricket Board. It includes most of the Messages and Comments posted on these articles on SAT Forums. The Book will soon be available through the Internet Book outlets. It is already on sale in Pakistan.


Probe Begins Against PIA Chief: Offers Public Apology for Mismanagement

By MA Siddiqui

KARACHI, November 27: The sky has started to fall for PIA Chairman Choudhry Ahmed Saeed, as country’s National Accountability Bureau (NAB) last week started asking him, and 17 other PIA officials, some searching questions and Saeed had to offer a humiliating and incriminating public apology over the Umra bookings fiasco which stranded more than 20,000 passengers in Saudi Arabia.

But Saeed is not giving up without his last ditch attempt to finalize the last multi-million dollar aircraft purchase deal for PIA, which aviation experts say, will be a simple rape of PIA, compounded many times over in coming years.

Following a string of in-depth and fully documented investigative reports by the South Asia Tribune, finally the sleeping sleuths of the NAB woke up last week to start a round of questioning about the many purchase deals, kickbacks and management disasters.

Saeed’s downfall started Nov 5 when his main player Air Vice Marshal Niaz was fired on charges of corruption but the real story revolves around the two PIA directors, believed by Saeed to be his men, but who turned out to be spies for the Army, and who turned approver against Saeed, giving the NAB all the documents and information it needed to start a probe against Saeed.

The story of the probe was broken by Karachi’s Daily News which gave a banner headline, shaking the PIA corporate structure from top to bottom. See pix above, Click for full story

The story revealed that despite his connections with General Musharraf, Saeed himself had been questioned by the NAB about the Rs 23 billion (US$380 million) grant which PIA had been paid in recent years.

Despite the grant and violation of rosy promises of annual profits of billions of rupees, PIA was sinking and asking for more grants from the Government. This annoyed Prime Minister Shaukat Aziz more than anyone else as Aziz was already not in favor of doling out billions to an organization just because its Chairman was a friend of the country’s military ruler.

The inside story of how NAB got involved and Saeed was betrayed was revealed by PIA sources to the South Asia Tribune. Two retired Army officers, who Chairman Saeed thought were his dependable confidants, were actually planted moles inside his corporate headquarter.

His own Special Assistant, Col. (Retd) Mahmud Ahmed and Col. (Retd) Ahsan Siddiqui, Director Airport Services, were secretly passing all relevant documents to the NAB while Saeed was trusting them as shields. Saeed had brought Col. Mahmud into PIA in violation of all rules and regulations, similar to those for which former National Assembly Speaker Yusuf Raza Gilani is now serving a 10-year jail term.

Mahmud was given Group-9 instead of Group-7 but he was soon confirmed as a permanent employee although rules ban any one over the age of 49 to be employed on a regular basis. Saeed thought that Col. Mahmud would protect him but while enjoying the perks and privileges, he was all the time working secretly for the Army.

Col. Ahsan was also given undue importance and positions and recently was the main character who was responsible for the Umra scandal. But instead of firing or punishing him, Saeed sent him to Jeddah to probe the Umra fiasco. By this time Ahsan knew that Saeed’s time was up so he returned a damning report blaming the PIA bosses for the mismanaged operation.

On November 24, Saeed had no choice but to come out with a public apology admitting the guilt saying: "It is unfortunate that PIA could not foresee this year the extent of the huge increase in the number of Umra passengers, who wanted to return within a particular timeframe and hence could not make adequate arrangements." Click for Dawn Report on apology

A press release issued by PIA said: “The chairman had assured that the responsible personnel would be taken to task and corrective measures would be taken for Umra operations next year and afterwards. Standing operation procedures are being amended accordingly and the corporation assures that this will not happen in future."

"On my behalf and on behalf of the corporation I extend my sincere apologies to all people who have been put to inconvenience," the release said.

But it raised more questions than it answered as Saeed had promised all those responsible will be taken to task but not one had been suspended or sacked. Instead, one accused had become an approver with the NAB and was now debriefing the Generals about activities of Saeed and his coterie of other civilians.

The 17 other PIA executives who were being questioned by NAB include close Saeed associated ousted Deputy Managing Director AVM Niaz, other DMDs Kaleem Malik and Farooq Shah, Kamran Hasan, Director of Marketing, Director Rashid Hasan, S.M. Siddiq and Shah Nawaz Rehman.

These executives are being asked about every deal Saeed had made in his disastrous 4-year tenure – from Boeing 777 to Airbus A-310, to Retrofit program in which seats were replaced in all aircraft for $50,000 a piece.

The focus would also be on the appointment of a friend of Saeed as Cargo Sales Agent for monopoly in Europe, the PIA shares scandal in which ordinary shareholders were ripped off by misleading statements and statistics given by the management.

Some of these officials are being asked why they had suddenly changed their opinions about the purchase of one kind of aircraft to another when as officers in other capacities they had opposed the same purchases.

But while all this is going on, Saeed believes he can still negotiate and get away with the final deal for PIA which will make his 4-year term as one in which PIA over-spent billions, more than anyone else, in purchasing aircraft which it could neither afford nor needed.

This deal is for Dash-8 Bombardier aircraft to replace the Fokker fleet and all experts say it is just not needed as PIA itself has said that not just the purchase will have to be financed by the Government, the operations of these aircraft for many years would have to be subsidized as well because they will run on socio-economic or “loss-making routes.”

Experts are seriously questioning the logic but Saeed is reported to have already made a down-payment of US$ 100,000 to Bombardier to clinch the deal and tie PIA in a way that it may find difficult to get out without a substantial loss.

Experts say Saeed has asked (as if PIA is asking) the Government for $10 million for buying 8 Bombardier aircraft. Then they will need an additional $10 million per year to run these aircraft operations.

The so called reason/justification is that these will be used to operate on so called socio-economic routes. They are incorrectly stating that even the US Government provide such capital (not calling is subsidy) to various US airlines to fly non profitable routes at remote areas.

“The reference to US is baked with lies. US provides subsidy that is true but they allow any licensed US airliner to bid on it. There is no grand fathering to one airline like PIA wants,” according to one expert.

“The funding approach is still coming from the non-competitive mind set. These people are using failed formulae from past decades to solve tomorrow's problem. The second problem is that they're looking at the wrong aircraft,” the expert said.

No one is buying Bombardier for quite some time. After the recent crash of a Bombardier plane belonging to the China Eastern Airlines in Inner Mongolia, because of some maintenance issues, all Bombardier aircraft have been grounded, experts say.

They argue that Government should not fund the purchase of these aircraft as it would amount to a plain and simple rape. “People like Saeed should go back where they came from and sell shoes. If Musharraf wants to write him a $10 million check for being a loyal crony, let him do so from his own pocket,” an angry PIA official said.

Others suggest that only PIA should not be forced to get in this mess. “Why not ask the currently licensed, and operating, private airlines to bid for these routes?” they ask.

Experts say PIA bidding for these routes will be no different than what Pakistan Tele-communications Authority (PTA) has done with mobile phone licensing. Let the best proven airline, or airlines, buy these routes with terms and conditions, and GoP doesn't need to pay them any money.

This will require changing the CAA policy but since there is no such policy invoke, let this job begin. The current PIA policy instead of the CAA policy must go.

Other SA Tribune stories on PIA

The Weird $2b PIA Deal Which has Raised a Billion Questions

Profits of Billions Shown by PIA are Manipulated Statistics

PIA to Pledge Entire Fleet to US: Registers Aircraft in Cayman Islands

Despite Tall Claims, PIA's Boat is Sinking Fast

PIA A-310 Lease Faus Pax Costs Millions to Airline

Unveiling the Web of Deceits, Scandals, Cover-ups in PIA

PIA Chief Fights PM Jamali to Win Roosevelt Hotel

Why PIA Seats Are Turning Into Hot Seats

How Top Bosses are Bilking PIA, Under Official Supervision

Secret Documents Reveal PIA Owns No B-777 Aircraft

PIA's Much Touted Retrofit Program Collapses Costing Millions

What is Musharraf's Cousin Doing in the PIA Kitchen?

PIA Refuses to Provide Key Documents to Defense Committee of Senate

Pakistan to Sell Roosevelt Hotel to Save a Sinking PIA

PIA Cargo Scandal Hits the European Skies

PIA Managers Caught in Their Own Misleading Web

Hush-Hush $50M PIA Deal Nobody Knows About

PIA Chairman's Right Hand Man Fired For Corruption

PIA Scandal Leaves 20,000 Stranded in Jeddah

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