KARACHI: By failing to renew medical insurance policies of its employees in the kingdom, the Pakistan International Airlines (PIA) is violating Saudi Arabia’s laws and this may lead to imposition of heavy fines, according to sources.

In the absence of an insurance cover, the sources said, the airline had to pay additional amounts on the medical bills of employees. And at the time of renewal of work/stay permits, the staffers had to make various “bogus arrangements”.

When contacted, PIA spokesperson Mashhood Tajwar said he could not say anything on the matter off-hand but would get back to Dawn with an official reply soon. However, he has yet to respond to the query. The sources said that PIA’s sponsor in the kingdom, the Eirad Group, had taken up the matter with the national carrier but owing to mismanagement the organisation had done nothing to abide by the Saudi laws.

Najeeb A. Sharief, the CFO of the group, sent a letter captioned “medical insurance” to Shahbaz Ahmed, the PIA’s country manager posted in Jeddah.

The May 20 letter says: “Reference to our meeting during my last visit to Jeddah on the above subject with you and the insurance staff, we regret to inform you that still the staff concerned has not renewed the medical insurance policy which expired a few months back.

“Further for your information, the medical insurance policy is a must and any negligence will expose the sponsor and the PIA to serious consequences and penalties.

“Please note that in addition to the above the following is already affecting negatively the performance of PIA:

“A) Heavy medical cost on day-to-day basis as every employee who needs medical assistance is going to any hospital as per his choice and as a result is paying heavy cost which incurs additional expenses to the company.

“B) At the time of renewal of Iqama an individual false arrangement is done by taking a temporary policy, resulting in additional cost to the company;

“C) When death or an accident takes place the company is exposed to risk and cost which recently happened costing the company heavily;

“D) The sponsor and company are legally exposed for non-renewal of medical insurance policy.

“In view of the above facts, I strongly recommend to renew the medical insurance policy as a top priority and stop exposure to the above risk and additional cost.”

Copies of the letter have been sent to Saudi officials, including Dr Mamdouh F. Ghazzawi, Ahmed Al-Hazmi, Saud Al-Hezayen and Abdul Mohsen Al-Heydyan.

Published in Dawn, August 8th, 2014