29 October 2004	Friday	14 Ramazan 1425

ISLAMABAD, Oct 28: The opposition senators on Wednesday raised serious financial irregularities in Pakistan International Airlines (PIA) and criticized President Gen Pervez Musharraf for "bailing out" the national carrier.

The senators specifically questioned the multi-million dollar deals stuck by PIA for purchase of aircraft and cargo handling in the Upper House. However, State Minister for Defence Zahid Hamid vehemently denied any wrongdoing in the deals and promised to provide additional details about the PIA agreements as demanded by the senators.

PPP-Parliamentarians Senator Rukhsana Zuberi accused the PIA chairman of evading the inquiries by the standing committee. She said a meeting of the Senate Standing Committee on Defence was held on June 9 and four months had passed since then but the PIA chairman was not providing the details asked by the committee. "Why the president and the prime minister are bailing out the PIA?"

Senator Zuberi said PIA had given a contract to a cargo sales agent in Europe without following the due process of law.

PIA's own internal audit documents show that the national airline is losing millions of Euros in foreign exchange annually, as it has handed over its entire cargo transportation in Europe to a firm owned by an ex-PIA employee at much higher commission in violation of the rules. However, PIA claims it had renewed the agreement with Golden Star Aviation in March 2003 and appointed it as cargo sales agent (CSA) for booking entire cargo transportation in eight European countries including France, Italy, Netherlands, Belgium, Denmark, Norway, Sweden and Finland.

Senator Farhatullah Babar while questioning the purchase of three Boeing 777 aircraft by PIA at a cost of $359.2 million asked if a third party was involved in the deal. "Were they brought directly from Boeing or was a third party involved in the deal?" asked Senator Babar.

He also questioned the projected figures of profitability amounting to Rs414.15 billion over the life of the aircraft.

Responding to the questions and observations of the opposition senators, Zahid Hamid said a third party was involved in the deal but added there was nothing unusual in it. The state minister said a US bank and a third company, Taxilla, were the guarantors of the deal which was "transparent".

However, when questioned about the identity of the owners of the Taxilla, the state minister said he would find the relevant Senator Akbar Khawaja claimed the whole deal was a "real scam" and the people in the Taxilla company should be exposed. Senator Khawaja said the whole fleet was pledged to the company for a paltry sum. He also questioned the out-sourcing of the entire reservation system of the PIA.

Replying to Senator Khawaja's question, the minister said any further details, which were required, would be provided to the House. On this reply of Mr Hamid, other opposition senators said the minister should have known the identity of the owners of the Taxilla.