The last time we discovered that the national flag carrier, the Pakistan International Airlines (PIA), was a burden to the economy, early 2016, two men died in the protests surrounding the proposed panacea of privatisation. The process got stalled, at least for six months. Six months turned into a year, a year is running towards the second, but as of now, PIA is officially a burden once again.
At its November 2, 2017 meeting, the Privatisation Commission decided to “reinitiate” the process of privatising the PIA — a commitment made by the Pakistan Muslim League-Nawaz (PML-N) government with the International Monetary Fund (IMF) when it secured a 6.2 billion dollar bailout.
A mammoth organisation buried under 300 billion rupees of debt, PIA had been spared privatisation in 2016 after it was converted into a public limited company (PIACL) by a joint session of parliament. This was despite the fact that the airlines has one of the highest employees per plane ratio — there are currently 29 aircrafts operating for PIA including three on wet lease. Over 13,700 permanent employees and 3,700 daily wagers employed through third-party vendors are engaged in various services relating to daily operations. The law converting PIA into a public limited company was called the PIAC Conversion Act, 2016, and included a bar on the federal government trying to transfer ownership of the entity. What could be sold was the management of the airline; ownership would always stay with the government as they would retain a majority share with 51 percent.
The recent, sudden ‘suspension’ of the national flag carrier’s decades-long operations to the United States is only the most prominent example of an airline in free-fall. But there is plenty of hidden administrative murk that has contributed to the status quo
The Privatisation Commission is now seeking a reversal of this rule because it would pave the way for the government to sell ownership, and not just management, of the airline.
Without a doubt, PIA is jetting towards doom. Which begs the question: has there been such little turnaround in the fortunes of the national flag carrier that it remains a priority to sell? And who is responsible?
No doubt the resumption of the privatisation process will spark labour protests once again — a sub-plot centres round the PIA unions’ support (or lack of it) to the PML-N. Talk of privatisation is seen by labour leaders as an attempt to rein them in. But in truth, PIA’s troubles go far beyond the everyday operational issues or ordinary workers’ resentment at being taken for a ride. The big issues lie elsewhere.
Let’s suppose Ilahi is exceeding his boundaries as chairman of the PIACL boards of directors, the question really is who can possibly stop him? The board, perhaps. And if they fail, the Aviation Secretary of the Cabinet Division Secretariat. Here’s the twist: how can someone summon themselves — Ilahi is also the aviation secretary.
The man in the PIA cockpit is Irfan Elahi, the chairman of the organisation. His tenure is marked by a number of murky deals and practices that have either seen the bypassing of PIA bylaws or decisions made to the outright detriment to the organisation. Some of Elahi’s choices have had larger consequences to the organisation, to the extent that the last PIACL board of directors meeting boiled over after a director questioned him about some deals struck.
Let’s suppose Elahi is exceeding his boundaries as chairman of the PIACL boards of directors, the question really is who can possibly stop him? The board, perhaps. And if they fail, the Aviation Secretary of the Cabinet Division Secretariat. Here’s the twist: how can someone summon themselves — Elahi is also the aviation secretary.
The conflict of interest is perhaps not his fault. But when life gives lemons, make lemonade.
Although bureaucratic nonchalance comes with the territory, hiring and posting irregularities — an almost universally accepted baseline for nepotism — is the least of the allegations against Elahi. The big charges relate to the concentration of power, the operational opacity this omnipotence allows, as well as the siphoning of taxpayer money to companies abroad without receiving any services in return.
The allegations against Elahi also relate to certain power wielders (and their relatives) benefitting on account of the national flag carrier. They have to do with a plane that went missing in Pakistan, only to pop up in Germany. They also relate to the acting chief executive officer, a German, who has a criminal case against him in Pakistani courts but cannot return to the country to testify — allegedly at Elahi’s behest.
The following four stories have largely been extracted from official PIA paperwork and correspondence that were exchanged, copies of which are available with Eos. Each story points to instances of how damage was dealt to the interests of the national flag carrier. The common link is Irfan Elahi, the man in whom trust was reposed to steer PIA away from turbulence.
The case of the Pakistani aircraft that popped up in Germany
Central to all allegations about a plane that went missing and popped up in Germany is former Acting Chief Executive Officer (CEO) Bernd Hildenbrand.
To recap: an Airbus-310 (A-310) that was owned by PIA was first rented out to a film company by Procurement Director Air Commodore (retd) Imran Akhtar, brother of former director general of the Inter Services Intelligence (ISI), Rizwan Akhtar. The plane was flown to Malta for the film company.
The A-310 was a “fly-worthy” aircraft. And yet, with it having been taken out of service for filming purposes, it never returned to the PIA fleet. Three departments — Marketing, Finance and Corporate Planning — were entirely bypassed by the procurement director. And the plane itself landed in Germany, in Leipzig, to be displayed at a museum.
Till recently, PIA had been claiming that the plane was never sold in the first place and it still had ownership of the plane. In truth, Akhtar removed Operations, Engineering, Marketing, Finance, and Corporate Planning from the loop and made the transaction without any kind of approval from the board of directors. The plane had working auxiliary power units, avionics and landing gears, among other parts. The film company offered 245,000 Euros for the aircraft while the German museum charged 45,000 Euros in marketing fees for displaying the aircraft in their museum.
The issue was raised in a Senate sub-committee session. This was attented by Irfan Elahi, 13 senators including Muzzaffar Hussain Shah, Gen Qayyum, Farhatullah Babar, Mushahidullah, Sherry Rehman and others. Senator Saleem Mandviwalla took the dais with documents claiming that just the fuel cost incurred by the national flag carrier was far greater than the sum paid by the film company.
While Bernd Hildenbrand is accused of having flown the plane to Germany, the role of Imran Akhtar has escaped public scrutiny. He could only have used and abused the aircraft if he had the permission of the Pakistan Civil Aviation Authority (PCAA) to do so. And he did: writing to the civil aviation, Akhtar asked for its de-registration from the aviation authority, even though that wasn’t his job to begin with. And to make matters more complicated, well-placed sources claim that influential quarters are now trying to have that letter expunged from the records so as to camouflage the act.
How did he get away with it?
Because at the helm of the PCAA is a friend: Irfan Elahi, also the chairman of PIA and the aviation secretary.
As the clamour increased at home about where the A-310 had disappeared, an inquiry was set up to probe the matter. The inquiry report was finally penned by two officers, Legal Advisor Ahmed Rauf and Chief Internal Auditor Javed Mansha. They held Hildenbrand and Akhtar responsible for the fiasco, asking the latter why he initiated the loan and sale of the aircraft when he wasn’t authorised to do so in the first place. The probe report raised questions about why the three departments that should have been in the loop for the sale of the aircraft were bypassed. It also claimed that Public Procurement Regulatory Authority (PPRA) rules had not been followed and due process was bulldozed.
In a statement issued by Senator Saleem Mandviwalla later on, the politician reiterated the claim that the A-310 had been sold without any award of a tender. “The market value of PIA’s A-310 was in millions of dollars but it was sold for just 5.3 million rupees,” he said.
Notwithstanding the inquiry, the fly-worthy aircraft had been sold for the price of scrap. But after its sale, a tender was finally issued in Pakistani newspapers while the plane was parked in Leipzig. No potential buyer in Pakistan could physically inspect the plane. The advertisement wasn’t printed in German newspapers and that precluded any potential buyers in Europe. The bottom-line, however, was that a tender was issued on an asset that PIA didn’t own at that point.
Such was the gravity of the case that the incumbent air chief, Sohail Aman, issued a statement declaring that if Imran Akhtar is indeed caught by the National Accountability Bureau or the Federal Investigation Agency, the air force would not stand by their man (who was in service at the time). A few days later, ISI chief Rizwan Akhtar resigned from service.
PIA’s crash and fall: the case of administrative chaos