Major purchase deals with international organizations involving high finances in foreign exchange have become a tricky and distrusted proposition in Pakistan; hardly a deal is signed that does not raise dust.
It is consequently not surprising that Pakistan International Airlines (PIA)'s purchase of aircraft to strengthen and upgrade its fleet should have hit a bumpy patch. There are two aspects to the deal.
One: is it transparent and has the airline observed the rules? And two: did PIA need the aircraft for professional reasons and would the beefing of the fleet accord some concrete advantage to the airline?
Some segments have expressed doubts about the above-board nature of the purchase. A group of National Assembly members wants the matter to be investigated. Interestingly, while the demand for formulating a parliamentary committee to probe the purchase came from the opposition, some members from the main party in the ruling coalition of the federal government concurred with it.
Members of the Parliament have argued that the PIA is a national asset; the people must know if there were irregularities in the purchase of planes or if the deal was transparent, as claimed by the PIA and federal authorities.
Considering that such purchases have always created controversies-and for good reason, the concern of the MPs is not only understandable but their demand reflects the misgivings of many people who closely follow national affairs.
Safeguarding the interests of the people and the state is what the politicians get elected for-whatever the views of the people on the authenticity of elections and the criticism of some leading political parties and their leaders about the fairness of the very electoral process that earned them membership of the elected bodies.
Over the years, the atmosphere has been inundated with doubts; deep distrust has taken over attitudes at all levels and this has happened because the leadership, on either side of the fence, has rarely, if ever, taken the people in confidence and because contradictions in their positions look more like rule than exception.
That a bargain vital for the future of the national flag career should be investigated to the hilt is highly desirable; other major deals should be similarly probed to clear the air of suspicions though it is a question that, given the current state of disillusionment among the masses and the thick, indeed concrete sheet of smoke constantly hanging in the air, if people would be ever satisfied.
MPs should go all the way and also investigate the role of the Ministry of Finance for approving the deal as also of the Defense Ministry and the Prime Minister's office that are believed to have been aware of the purchase and the manner in which it was carried out. It takes more than one party to clinch a deal like this and if anything needs to be explained, all the official components should be focused on.
PIA's case for the purchase of planes is based on the argument that its fleet was ageing-the last addition to it dates to 1991 while many aircraft in its fleet are much older-that is not a reference to the superannuated F-27 aircraft that give a fright to passengers that must travel by it and which belong more to a museum of airlines rather than transport passengers. (It should be welcome news for domestic passengers that rickety, ramshackle F-27's of PIA would fly in to oblivion by the end of the current year).
Another point in the purchase is whether the organization should have gone for new aircraft or its decision to buy second hand ones is correct. Aviation experts are of the opinion, shared by a former Managing Director of PIA, that second hand aircraft are better for small airlines because they are not equipped for handling teething problems of new aircraft.
However, PIA is to meet its immediate needs with three used aircraft while it would acquire five new ones later under the purchase deal. There is also the matter of financial affordability as new ones are more expensive.
On these two counts, PIA does not seem to have erred. But should it have spent millions of dollars more when airplanes costing less from another renowned company were available for less cost? The airline has borrowed money for the purchases and cannot be regarded to have been in a position to pay an additional few million dollars.
PIA seems to have explored all avenues before narrowing down its choice on Boeing and Airbus, both products of reputed and reliable companies. The contentious point is the preference of the PIA's high powered six-member Aircraft Acquisition Committee' for expensive Boeings and that it too when the same were earlier in the market for a lower price.
PIA sources deny this charge and claim that its decision was guided by the "newer design of Boeing 777 entering in to service four year later than Airbus 340, greater passenger capacity making for higher revenue earning potential and lower fuel burnt per seat", besides some other advantages.
On the financial side, the organization seems to have been guided by the loan guarantee for purchasing Boeing aircraft while Airbus failed to come up with a similar offer. One feels that PIA is a sufficiently prestigious national career that arranging a loan should not have been difficult for its financial managers, particularly as the Government of Pakistan was providing sovereign guarantee.
The arranging of finances should not have been the decisive consideration for the organization and the ministry of finance should have helped the PIA in removing the fiscal hurdle, not that PIA could not do this on its own because it was not the first time for the organization to purchase or lease aircraft.
PIA sources have also emphasized that the MOU signed with Boeing includes a 'no broker' clause and that the company agreed to neither pay commission nor involve any intermediary in the deal. The Boeing Company would be 'liable to pay penalty' if facts contrary to this agreement are established in subsequent years.
Such clauses have never hindered commissions in the past and they are unlikely to block corruption in the future. They cannot ensure transparency of any deal and are hence to be treated as irrelevant. The deal has to be viewed in the context of fulfilling PIA's professional requirements as an airline.
The PIA plans to reach new destinations in Asia, Middle East, Europe, Africa and America with the upgraded fleet. The important thing should be the PIA's performance.
The airline has not been in good health, nor has it earned kudos in recent times from passengers. If it can do the trick with an upgraded fleet, it would be vindicated. Otherwise, the flight would become bumpier. As for transparency, that is MP's responsibility to find out.
