PIA Caused Loss Of KPR 310.5 Million To The Nation---Transparency Int'l

Monitoring the financial irregularities of institutions in the country, Transparency International has written a letter to the Ministry of Defense in which it has been identified that Pakistan International Airlines Corporation has violated the rules and regulations while issuing tenders for the stay of its employees in the hotels of different cities. Due to non compliance of the rules millions of rupee loss occurred to the national exchequer. The letter was written on March 08 2012 to Nargis Sethi secretary Defense that gave the details if the corruption that was also pointed out in in the annual report of auditor general.
The letter contents indicated that all the national institutions had to issue tender notices under the rule giving the details of the requirements of their departments and offers are sought from different suppliers or companies. The tenders of the companies whose rates are the lowest and items are according to the standard, are accepted. PIA needed rooms in the hotels of different cities in the country for their employees for which a five star hotel offered the rooms with the condition to use its hotels in every city and agreement for two years was signed with this chain of hotels. The hotel fixed the room rent at Rs. 5000 per room, while the offers of other 5-star hotels providing room at a rate of Rs 4800 per night were rejected.
According to transparency international, PIA could save million of rupees if it would have done agreement for each city separately. It further said that in the emergency situation only this sort of procurement is permitted. As there was no emergency situation at the time so it was clear violation of the clause" alternate methods of procurement". PIA has signed agreement for two years that will cost Rs. 290.3 million for cockpit crew while expenses for the cabin crew will be Rs 1.05 million. If the tender of the hotels offer the lowest cost would have been accepted save itself from a loss of Rs 310.5 million.