Rs 300 billion corruption but NAB fails to respond

By Ansar Abbasi

ISLAMABAD: On the eve of a new global report on corruption, the Transparency International Pakistan has claimed that the TIP alone has identified corruption cases worth Rs 300 billion in different federal government departments during one year.

Talking to The News Chairman TIP Adil Gilani lamented that the government did not show any interest in probing these cases of corruption. He, however, said that it was only the Supreme Court of Pakistan, the Public Accounts Committee of the National Assembly and the PPRA, which took notice of some of these corruption cases.

He explained that generally the identified corruption cases involved violation of the Public Procurement Regulatory Authority (PPRA) Rules of 2004. The Transparency International is releasing its report on Tuesday at 2 pm amid indications that Pakistan is all set to hit further lows amongst the world’s most corrupt nations. The 2009 report showed Pakistan climbing five numbers from the previous 47 to become the 42nd most corrupt country in the world.

Gilani expressed his disappointment that there was no effective accountability apparatus presently operational in Pakistan due to which corruption was on the rise. He explained that the TIP referred a number of corruption cases to the NAB but it did not proceed even in one single case.

Amongst the mega corruption cases, he said the Rental Power Projects of the government, presently under the scrutiny of the Supreme Court of Pakistan, was on the top. He claimed that under the Rental Power Projects, the government awarded 14 contracts in violation of the PPRA rules as also stated in the ADB report, causing a loss of over US$ 2 billion. He said that the TIP had also written to the apex court on this case of massive corruption and irregularity.

He said that the TIP also wrote to different authorities about corruption in Pakistan Steel, whose sale policy and procurement had caused reported loss of Rs 22 billion. This corruption case, though ignored by the government, had taken been up by the Supreme Court of Pakistan.

Gilani also talked of the alleged violation of Pubic Procurement Rules 2004 by Pakistan Railways in the tender for procurement of 150 locomotives, only US made, which might have caused a loss of at least Rs 40 billion to the national exchequer. The project, he said, is presently on hold.

Regarding the OGDCL, which made headlines in the recent past when Prime Minister Gilani appointed his jail mate and a convict who was not even a graduate as its managing director, Gilani said that the TI had also reported to the government authorities about the purchase of compressors for $30 million for Qadirpur Gas Field without inviting public tenders from M/s Valerus, which is a violation of the Public Procurement Rules 2004. He said the TIP also reported another violation of the Public Procurement Rules 2004 in tender for supply of rental drilling rigs costing the Government of Pakistan Rs 3 billion per year. He added that the Trading Corporation of Pakistan awarded contracts at exorbitant rates to cartels of Stevedores and Transporters in 2009, wheat and fertiliser, causing loss of over Rs2 billion.

Regarding the Trade Development Authority of Pakistan (TDAP), he said, it saved a claim of US $2.2 million for extra/additional work to the contractor of Expo 2010-Shagnahi, China, which was also supported by the Ambassador of Pakistan in China. On TIP objections, he said, the TDAP rejected the claim.

About the National Insurance Corporation Limited (NICL), he said, the TIP identified a case of purchase of 803 kanal-19 marla plot in Dubai’s Liberty Tower at the rate of UAE Darham 2,750 per square feet against the market price of AED 1,200 per square feet. Alleged loss to exchequer in this case, he said, was Rs 900 million. In another case, 10-acre plot was purchased in Korangi Deh Phihai, in August 2009 at the rate of Rs 90m per acre, against maximum market price of Rs 20m per acre. It caused a total loss of Rs 7 billion.
In yet another case pertaining to the NICL, land was purchased in Lahore in 2009 for Rs1.5 billion against market value of Rs 30 million. It caused a loss of Rs 1.2 billion to public kitty.

In case of EOBI, he said that the TIP challenged the EOBI to invest in one of the four Centaurus Towers in Islamabad and the Intercontinental Hotel, Islamabad. The EOBI was also purchasing Karachi-Hyderabad Motorway and investing Rs 27 billion against the provisions of EOBI Act but the PAC later stopped this move.

Regarding the NHA, he said that according to the AGP Report 2008 NHA has irregularities of Rs 29 billion out of Rs 42 billion annual fund. He said that after eating away its annual development budget of 2010, now the NHA intends to reconstruct the M-9 Karachi-Hyderabad through some other investment. It needs Rs 27 billion for the project. He said that the NHA management planned to use EOBI funds for M-9.

Gilani said that Zafar Iqbal Gondal (brother of a PPP minister), who was Member Finance NHA, has been transferred and posted in January 2010 as Chairman EOBI. Asad Ullah Shaikh, another PPP appointee, who refused to allow Rs 27 billion to be used for a losing project, was sacked to make way for Gondal. He said that after these changes, the EOBI made a proposal to become a partner of the NHA on the M-9 under the Public Private Partnership Scheme of the GoP as BOT (built, operate & transfer) Project, based on the recovery of toll tax.

Gilani said that nowhere in world, road projects on BOT basis are financially viable but still the EOBI decided to own M-9 and build it. In 2005, he said, the board of trustees of the EOBI had decided to invest in the real estate. He added that for this purpose, PRIMACO (Pakistan Real Estate Investment and Management Company Ltd) was established, which is a wholly owned subsidiary of EOBI. PRIMACO has been registered with Securities and Exchange Commission of Pakistan (SECP) and this company has launched many real estate projects.

The PRIMACO, he said, has overstepped its mandate and prepared a proposal for the EOBI to build the M-9 at Rs 27 billion. They have also proposed to make the NHA as executing agency for award of consultants and contractors’ contract, total 10 numbers, and appoint PRIMACO as project managers of this project. The NHA, he said, has already awarded 10 contracts to blue-eyed contractors and consultants, without public tendering, biggest being Rs 4 billion contract to one contractor against PPRA Rules, and are awaiting approval of the EOBI to send an official letter of government approval to proceed. According to the EOBI Act and rules, he said the EOBI cannot invest public pension funds in an infrastructure project. The EOBI under Rule 2 (i) can invest two-and-a-half per cent of the portfolio. The EOBI’s current portfolio is around Rs 120 billion, minus billion of rupees losses in share market. This means only Rs 1.8 billion can be invested in M-9. But M-9 is a Rs 27 billion project.

Gilani added that in July 2010, the TIP wrote a letter to the NHA for its failure to obtain CAR, (Contractor All Risk Policy) from the NLC Northern Bypass Shershah bridge contracts causing the exchequer to pay Rs 170 million for the reconstruction of the bridge.

Additionally, contracts in 2008 & 2009 worth Rs 467 million, Rs 203 million and Rs 124 million were awarded to NESPAK in violation of Public Procurement Rules 2004. Gilani added that none of the contracts awarded by the NHA in the last two years are in compliance with the Public Procurement Rules 2004. In case of PEPCO, the TIP chief said that it reported Rs 2-2.5 billion corruption in purchase of 30 million energy saver bulbs scheme costing Rs 6 billion.

A Tale of Three Cities

By General Mirza Aslam Beg

Charles Dickens in his novel – A Tale of Two Cities depicts a paradoxical depiction of the Post-French Revolution. He says: “It was the best of times; it was the worst of times,” but the situation of the two capitals, Kabul and Islamabad, however is outrightly reminiscent of only the “worst of times,” being the most tormented regions of the world, due to insane invasion of Afghanistan, which has wrecked the country and has caused the wanton killing of millions of innocent men, women and children. It is being repeated in Pakistan also by various means, including the men-killing machine called drones, blind and oblivious of all humane considerations. Kabul is fighting for its national freedom for the last thirty years, while Islamabad is fighting against terrorism and for the consolidation of the democratic order, against despoticism. In both cases, the struggle has reached the point of decision. In both cases Washington is the common factor, hence the Tale of Three Cities.

Faisal Masjid Islamabad

Islamabad is engaged in a grim struggle on several fronts: The most serious is the confrontation with the judiciary, where the government is trying to shield the NRO beneficiaries and the 18th amendment through manipulations of utterly indescent nature. The nation holds it breath, while the decisive moment is drawing closer for the final judgment to provide change and the opportunity for democracy to flourish under the supremacy of the Constitution. The failure to ameliorate the sufferings of the under-privileged is causing deep resentment. The scale of corruption has not only tarnished the image of the country but has also made the life of the common man miserable. The escalating prices of daily consumer goods, energy crisis, appalling law and order situation and the fear of the administrative system collapsing, has created a deep sense of despondency. People, therefore, demand a change, which is being resisted by means unbecoming of a democratic government. The print and the electronic media of Pakistan, during the last decade, has gained much of respectability, freedom of expression and expertise in investigative journalism and is keeping the public informed of the good and evil, causing deep friction between the government and the media. The confrontational situation on our borders with Afghanistan has had a deep impact on Pak-US relations, at this critical moment, when the occupation forces are facing the problem of safe exit from Afghanistan. Pakistan is not ready to commit its forces in North Waziristan, which is the bone of contention between Pakistan and USA, and is viciously not only linked to the issue of aid and assistance, but also the reimbursement of heavy expenditure Pakistan has incurred for engaging in War on Terror!

Notwithstanding this critical situation, there is no fear of the system collapsing, because the prime institutions of Pakistan, such as the judiciary, the armed forces, the political opposition, the media and the civil society are not asking for any drastic change, but a clean-up of the system, to ensure a sustainable democratic order.

Presidential Palace Kabul

Kabul stands at the turning point of history, as it was in Vienna in 1683, when the advancing Ottoman armies had laid siege to it, the heartland of Europe, and suffered a major defeat, resulting into the dismantling of the Ottoman Umpire and the resultant decline, defeat and degradation of the Muslim World as a whole. However, after World War II, as the colonial forces weakened, many Muslim countries gained independence, which was seen as threat to the interests of the western world, particularly after defeat of the Soviet Union at the hands of the Taliban and its retreat from Kabul. The vacuum thus created was promptly filled by the United States and its allies, by occupying Afghanistan – the heartland of the Muslim World. The purpose was to degrade and defeat the Taliban power, and extend American primacy and pre-eminence into Eurasia and beyond. But that was not to be, because the people of Afghanistan, after defeating the Soviets, have convincingly defeated the sole super-power of the world and its allies. The Afghans, therefore stands at the cross-roads, ready to lay down the parameters of peace in Afghanistan and the region. Kabul establishes the historical linkage with Vienna, which inflicted defeat on the rising Muslim Power, its fall, and now its rises again from the soil of Afghanistan, after a long period of over three centuries. Civilizations, thus cyclically rise, fall and then rise again, with a new momentum, thus repudiating the notion of clash of Civilizations. On the contrary, civilizations get matured through intermingling with each other.

The Americans and their allies – European Union and India, therefore are faced with a sense of humiliating defeat on several fronts, with no clear modality for a safe exit from Afghanistan. Taliban now control over eighty percent of Afghanistan and the occupation forces, control main air bases, communication centres and the garrisons of Kandahar and Kabul only. The Afpak Strategy, i.e. the troops surge and intensified drone attacks also have failed to provide the “position of strength needed for meaningful negotiation with the Taliban”, who are demanding withdrawal of the occupation forces, prior to the negotiations. The effort to divide the Taliban has also failed, thus limiting the option to direct negotiations with the Taliban, on their terms. The immediate neighbours of Afghanistan, i.e., Pakistan, Iran and Russia, constitute the external front to Afghanistan. Admiral Petreaus’ policy of pressurizing and confronting Pakistan has back-fired and Pakistan has succeeded in giving a clear message that no such venture will be entertained in future. Iran being unduly pressurized by USA for the last several years, is paying back, by keeping a blind eye, to the smuggling of arms and ammunition into Afghanistan from the neighbouring countries. The Russians, since 2004-5 have let loose the regional smugglers of arms and ammunition, in retaliation to the revolutions whipped-up by the Americans in the Russian ‘near abroad’ in Georgia, Ukraine and Kyrgyzstan. Thus the hostility of the neighbours has come heavy on the occupation forces, with defeat staring into their faces.

Capitol Hill

The Americans are facing a serious political dilemma at home, as the French faced in Vietnam, and lost the war in Paris. Due to the split between Pentagon and the State Department, on Afghan military and political strategy, the Security Advisor to the President, James Jones, the economic advisor and the strategic planner Axelrod, have resigned, while the public opinion is gradually turning against the war, with 65% demanding troops withdrawal from Afghanistan. The economic situation is further deteriorating, adversely impacting the life of the common man. While the strategic talks are being held at Washington, seeking a peaceful solution of the Afghan issue, the US policy appears working on cross-purposes as explained by the Secretary of State, Hillary Clinton: “The US is working on an outreach process with Taliban promising that if they remove Al-Qaeda, (numbering not more than seventy, according to CIA), the US will help them re-integrate into the Afghan society,” whereas a society destroyed by invasion, with institutions demolished and the country ravaged by lawlessness, it is beyond the capacity of the defeated armed forces of USA and the allies to integrate the society. Only Taliban under Mullah Omer could do that, as they did during the nineties – 1996-2001. With such a mindset the strategic dialogue in all probability would be working at cross-purposes. However the saving grace for the talk could be, if there was an agreement on the issue of drone attacks; immediate allocation of two billion dollars flood relief and not military aid package as proposed, would win the hearts of the Pakistani people; firm commitment on exit from Afghanistan, and the willingness to negotiate with the Taliban. The current strategic talks are not transactional any more, in which America could seek only to buy Pakistan’s loyalty through threat, coercion or aid. These talks would have no meaning, if “America looses substance in its relationship with Pakistan.”

It is time for USA and its allies to accept gracefully their mistake and consequent failures. Alexander Pope rightly counseled: “A man should never be ashamed to own he has been in the wrong, which is but saying, in other words, that, he is wiser today than he was yesterday.” Will USA display the moral courage to accept the mistake, is the question.