ISLAMABAD: The Auditor General of Pakistan (AGP) has blamed the absence of professional and experienced leadership for the present state of affairs of the Pakistan International Airlines (PIA), regretting that it was being run like a non-business entity.

A comprehensive audit report submitted by the AGP to the Supreme Court on Tuesday painted a gloomy picture of the financial health of the national airline, highlighting that 44 members of the PIA Board of Directors (BoD) were nominated by the government during 2008-17, but none of them had relevant experience in the aviation industry.

According to the report, most of the board members were either serving or retired civil or military bureaucrats, politicians or businessmen and due to lack of relevant experience the successive BoDs neither efficiently formulated any strategic business plans or policies nor effectively executed the best practices of the airline industry.

Audit report submitted to SC says almost 457 employees appointed on fake degrees, including 16 pilots

A three-judge SC bench headed by Justice Sheikh Azmat Saeed had taken up a case on reports that the PIA accumulated Rs360 billion losses by December 2017 and its total liabilities amounted to Rs406bn against the assets of Rs111bn. On June 30, the apex court had ordered a comprehensive audit of the national airline.

The special audit report highlighted the absence of prudence, due diligence and best industry practice in policymaking, ad hocism in decision-making, poor human resource procurement, marketing, contract, fleet, fuel, inventory and financial management.

The report recommended revision of the national aviation policy with the Gulf and Turkish airlines on the basis of bilateral commercial interests, besides constituting an efficient and dynamic BoD to turn around the airline. It called for appointing chief executive officers (CEOs) and managing directors (MDs) on merit and discouraging unnecessary interference from the government and staff/officers association. The report suggested merit-based appointments/transfers/postings and strong internal control.

The report regretted that the role of BoD committees was not up-to-the-mark in guiding the board in different strategic issues like fleet/financial/human resources and contract management. Absence of the finance secretary from most of the BoD meetings was also a serious concern.

The report also highlighted violations of prevailing rules and regulations in the appointment of MD/CEOs, besides exorbitant pay and allowances given to them against the standing instruction of the finance ministry, causing extra burden of Rs98.2 million on the PIA. Similarly, the issue of transparency and serious irregularities were also noticed in fixing the pay and allowances of other officers on personal liking and disliking.

According to the report, the overall human resource management is also in a pathetic state with no uniform merit-based policy for appointment, promotion and postings. Foreign postings are made on favouritism/nepotism without observing merit, resultantly sales targets are compromised.

Almost 457 employees are appointed on fake degrees, including 16 pilots of which seven are still working on stay orders, 52 engineering staff or officers of which 36 still on service, 67 officers and 33 airhostesses.

Referring to the skewed aviation policy, the report said the aviation policy of 2015 did not safeguard the interests of the aviation industry. The flying/grounding rights accorded to the Gulf and Turkish carriers, especially after the 2015 policy, were beyond any justification and without considering bilateral commercial interests.

Published in Dawn, October 3rd , 2018