• Wednesday, February 26, 2020

PIA awards Rs 700 m contract to dubious company

Discussion in 'Pakistan Economy' started by ejaz007, Jan 21, 2020.

  1. ejaz007

    ejaz007 SENIOR MEMBER

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    PIA awards Rs700m contract to dubious company

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    ISLAMABAD:-In a scandalous deal, the Pakistan International Airlines (PIA) have awarded a contract of Rs700 million for the up-gradation of In Flight Entertainment (IFE) in eight Boeing 777 aircraft to a local company which was registered only two months before the tender was floated.

    A retired Pakistan Air Force officer, Group Captain (R) Khawaja Moizuddin, is the owner of that company, M/s Avionic Solutions Private Limited. It was incorporated with a capital share of Rs100,000. He is said to be a close friend of PIA CEO, Air Marshal Arshad Malik. The PIA spokesman termed the allegation “highly unfair and absurd.” Malik is presently under suspension on the order of the Sindh High Court after a petitioner challenged his appointment.

    Avionic Solutions, according to PIA spokesman, has extensive commercial and military avionics modifications and technical support experience and are working with local and international players. However, this claim is in contrast with the details mentioned in the documents available with The News. They indicate the company was registered only in March last year, two months before the tender was floated by PIA in which Avionic Solutions participated and won. M/s AAR International Corporations of Singapore, with 70-year experience in the relevant field, was another company that participated in the bid and lost.

    Other than Khawaja, his wife and daughter, a student, are Directors of the Avionic Solution. By the time of participation, it had not filed a single tax return, annual report and there was no auditor to look after its accounts. The PIA’s spokesman initially said that Avionic Solutions was not a newly formed company and later said Terms of Reference designed for the purpose didn’t specify how much experience the company should have. When asked that TORs might have been tailor-made to oblige a particular bidder, he said PIA wanted “indigenous solutions” of IFE and there is no local company having relevant experience. He said the service provider will be paid only after its products are certified to be fit for the purpose.

    The IFE is a digital entertainment system consisting of audio and visual gaming as well as other material designed to entertain the passengers, especially during flights. It is used as a marketing tool and is considered a need for the modern airline industry. Installation and up-gradation of IFE is a highly technical job and needs certification of the European Union Aviation Safety Agency and Federal Aviation Authority of the US Department of Transportation.

    Out of eight aircraft selected for up-gradation, three are 16-year old, two are of 14-year and another two have a life of 11 and 12 years respectively. As per aviation policy, no aircraft can be operated after 20-year life. Major airlines like Emirates have phased out the above series of Boeing 777 aircraft and most airlines have a policy of using aircrafts not older than 12 year as per average as prohibitive maintenance is required on fleet older than 15 years.

    In the case under question, tenders were invited in June and two companies participated: AAR International Corporation which was registered in 1951 and Avionic Solutions which was only two-month-old at the time of floating tender. Incidentally, PIA’s Chief Financial Officer Khalilullah who signed this award to Avionic Solution was also hired in the month when a tender was floated. Avionic Solutions, the winner of the Rs700 million project, doesn’t have any experience of carrying out such a project, a fact admitted by PIA spokesman who was initially of the view the winner has “extensive experience.” The company was registered on the same date (March 18, 2019) with the Securities Exchange Commission of Pakistan and the Federal Board of Revenue.

    When asked if this is true that it was a family-owned company where a family head has appointed his wife and daughter its directors who don’t have any experience, the spokesman said Avionic Solutions is a private limited company including partners from the family which “is a common practice in Pakistan.” To another question that whether it is true that the company was set up just two months before the floating of tender, the spokesman said “the evaluation criteria required a registered company which it was at the time of bid submission.”

    He said TORs required a solutions provider that can provide an indigenous cost-effective solution. The mandatory requirements were of a company that is registered with local companies and taxation regulators and could provide components, services, and support in compliance with FAA Part 21 and PCAA certifications, he said. Asked then why PIA allowed a foreign company to participate in the bid if a local company was required for “indigenous solutions”, he said the foreign company had a local representative.

    https://www.thenews.com.pk/print/601878-pia-awards-rs700m-contract-to-dubious-company
     
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  2. khail007

    khail007 SENIOR MEMBER

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    Some independent body should thoroughly investigate for the provided contents, guilty should be brought to justice.
    Further the laws for false contents also to be made more stringent. If proven wrong, those responsible for providing such contents should be fined heavily with added jail terms for their correction.
     
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  3. War Thunder

    War Thunder SENIOR MEMBER

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    So its a new company that sent a proposal that was accepted.
    What's wrong with that? As long as the proposal made sense and was both cost effective and quality oriented compared to what others might have sent?
     
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  4. fitpOsitive

    fitpOsitive SENIOR MEMBER

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    @Dubious hain? What will you do with much money? :mad:
     
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  5. Imran Khan

    Imran Khan PDF VETERAN

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    because with 100000 capital you can not have contract of 700 millions janab . its fake company . 1 lakh ki to aik seat ka saman nhi aata .:rolleyes:
     
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  6. Sine Nomine

    Sine Nomine ELITE MEMBER

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    You spoiled the party:disagree:
     
  7. Baz

    Baz FULL MEMBER

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    Fake news
     
  8. razgriz19

    razgriz19 SENIOR MEMBER

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    Soooo obviously a massive fraud. But the article and the source has no credibility either. There is no policy that states an aircraft can't fly after 20 years of service and its not an industry standard either
     
  9. 313ghazi

    313ghazi SENIOR MEMBER

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    Someone should take this information to court and demand an investigation. PIA should have to prove that it's tender process was open and transparent and the contract was rewarded to the best candidate.
     
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  10. litman

    litman SENIOR MEMBER

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  11. Cent4

    Cent4 FULL MEMBER

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    Thats nominal account. You can even setup a company with 1rs. Its common for new companies to be setup this way.
     
  12. Hiraa

    Hiraa FULL MEMBER

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    Lol itni seedhi sadhi dunya naheen hai.
     
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  13. Syed1.

    Syed1. SENIOR MEMBER

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    I'll wait for a more credible source to report it ... The News is patwari media house and only donkey eaters read it.
     
  14. Flash_Ninja

    Flash_Ninja SENIOR MEMBER

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    PIA says they have experience with military and civillian market and do international work. I dont know how it works legally, could they not be a subsidiary of a larger organisation just registered in Pakistan?
     
  15. pak-marine

    pak-marine ELITE MEMBER

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    recently a lot of news about PAF corruption is coming in the media , there is also news about PAF's fazaia housing scheme also making rounds this involves billions of rupees , now we have these ex - paf staff .. wth
     
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