ISLAMABAD, Nov 22: Pakistan International Airline has said that a foreign company which was given the contract for the sale of surplus inventory still owed $1.5 million to the airline, and PIA’s solicitors in London had served the IAA Aerospace (HKG) Group a legal notice and have demanded payment of the outstanding amount.

Clarifying its position regarding a news item published in Dawn on Monday titled ‘PIA loses Rs60 million in spares sales deal’, a statement issued by the airline said the CEO of the IAA Group had recently visited PIA’s head offices and agreed to settle the outstanding amount.

Giving the background of the deal, the statement said, the PIA Board of Directors at its 260th meeting held on February 14, 2002 recommended for the sale of PIA surplus inventory of 150,000 parts that were lying in the inventory for over

20 years. Finally, three vendors out of 13 were short listed and recommended for final negotiation.

It said that the PIA’s board of directors approved the sale of surplus inventory in May 2003 on consignment basis to Kortek Aerospace on 75/25 ration and minimum sale price of $1.8 million in four years. Later, Kortek showed inability to provide guarantees and did not conclude the agreement with PIA.

According to the statement, Messer IAA Aerospace (HKG) Group was one of the three short listed companies improved their offer to 80/20 ratio and increased minimum sale price to $2.5 million in three years. Accordingly, PIA chairman and the airline’s board approved the signing of agreement with IAA Aerospace (HKG) Group.

PIA says that during the past three years (2004-2005), IAA Group has remitted over $1.0 million in PIA account.