06-16-2006, 08:17 PM
<!--QuoteBegin-->QUOTE<!--QuoteEBegin--><b>PAC wants engines scam packed up </b>
FT
Ahmed Rauf
<b>Was the deal struck in 'good faith' as some PAC members seem to think?
The Public Accounts Committee of National Assembly is under serious pressure to revive the otherwise âsettledâ issue of the financial loss of over US$100 million Pakistan had to face because of defective railway engines it purchased from China (see TFT stories: âGermans called in to fix Chinese problemâ; August 19-25, 2005 and âRailways minister holds former chairman responsible for bad deal;â September 30 - Oct 06, 2005).</b>
The deal, struck in 2000, involves three retired army generals, two of whom are serving in the present government set-up. Lt-Gen Qazi Javed Asharaf is minister for education and Lt- Gen Saeedul Zafar is working as chairman NEPRA (National Electric Power Regulatory Authority, Pakistan).
<b>To recap, Pakistan railways and a Chinese manufacturing company struck a deal in 2000 for the supply of 69 locomotives to Pakistan at a cost of US$100milion. The 33 locomotives Pakistan received developed serious problems within a year of being employed on the tracks. They had to be withdrawn. The withdrawal of the engines from local routes caused substantial losses to the railways, forcing the ministry to suspend the import of the remaining locomotives from China</b>.
At the time the deal was struck, Lt-Gen Qazi was railways minister in Musharrafâs cabinet, Lt-Gen Saeed Zafar was chairman and secretary railways and Lt-Gen Butt was general manager Pakistan Railways.
The senate first took up the issue of the locomotives in mid 2005 after a PPPP (Pakistan Peopleâs Party Parliamentarians) Senator Dr Abdullah Riar pointed to it. After Riar brought up the issue and named Qazi as responsible for the deal, an inquiry report was compiled. The report said that Qazi had finalised the deal saying that the import of these new engines would revolutionise the railways system in Pakistan.
After a three-hour-long debate over the scam, the committee decided to form a sub-committee to further probe the issue and affix responsibility. Sources say the committee recently met and within half hour the issue was âsettled on very frivolous groundsâ, as a source privy to the committee meeting put it.
âPAC decided that although the deal was faulty and Pakistan had suffered losses, it [he deal] had been struck by the three former generals in âgood faithâ, something they could not be chided for. Hence the issue was settled once and for all,â said the source. However, other more conscientious PAC members are unhappy over the sub-committeeâs strange logic of settling a million dollar scam with such haste and nonchalance. These members want to press the issue.
âIâm wondering why this allowance to make decisions out of âgood faithâ was not available to politicians and civilians who are languishing in jails for misusing an official car while others get away for causing losses in millions?â asked a PPPP MNA.
MNAs Qurban Ali Shah and Qamar Zaman Kaira, members of the special sub-committee formed to review the matter, have confirmed that they will re-open the issue and get to the bottom of it. However, this has led to a sharp division within PAC: some members want the case to be forgotten while others are determined to follow it to its conclusion and restore PACâs credibility.
Strangely, the Auditor General of Pakistan has been silent and disinterested in the issue. At the recent subcommittee meeting, auditors sat around tight-lipped, not joining in the discussions. It was the federal secretary railways Shakeel Durrani who raised the most scathing questions. âLt-Gen Javed Ashraf Qazi was then minister of railways, Lt-Gen Saeed Zafar was secretary railways and General Butt was GM Railways. If you are serious in probing this issue, these three generals needs to be summoned and grilled,â said Durrani. Other PAC members did not follow up on this demand and remained quiet.
However, Durrani then contradicted himself by saying: âIf I were secretary at the time the deal was made, I would have re-advertised the tender to get more viable bids for the import of engines for Pakistani railways. This deal was struck because there was only one bid from China and we took it. This was the time right after the 9/11 attacks and no one was ready to offer Islamabad a loan. Given that, the only option left was to seek a loan from China and buy these engines.â
Surprisingly, this line of argument had everyone convinced; no one considered the fact that the deal with China was struck in 2000, much before the 9/11 attacks in 2001! Also, after the attacks, things began to improve for Pakistan: economic sanctions were lifted and financial aid started pouring in from Western countries and lending agencies.
Earlier, then-federal minister for railways Shamim Haider submitted the name of former chairman of Pakistan railways Lt-Gen (retd) Saeedul Zafar to the senate during a question-answer session on the scam. The question was raised by PML senator Kalsoom Perveen who wanted to know who was responsible for the purchase of engines from China on commercial and supplier credit. Her intervention was followed by a heated debate over the details of the deal, with most senators refusing to accept Haiderâs justifications for it.
Later, Haider, in a written reply to the senators, said that the deal, which has caused the country a major financial loss, was approved by Lt-Gen Zafar. However, observers say that being the railways minister himself, Haider should know that such deals cannot be finalised by the secretary or the chairman without the approval and consent of the minister.
âIt is unfair of Haider to hold Zafar accountable and not Javed Asharf Qazi who was the minister at the time. Obviously, the deal could not have been reached without Qaziâs knowledge,â said one observer. Expectedly, after the senate session was over, Zafar strongly disapproved of the official senate report in which he was singled out as being responsible for the deal with the Chinese manufacturers.
âThose accusing me of getting into a shady deal should not forget the circumstances in which the deal was finalised. At the time no country would lend a single penny to Pakistan. We were lucky that the Chinese were willing to get into such a deal with us and supply us with credit to buy the engines,â Zafar had told TFT. âI am shocked to see that the Railways minister has singled me out in this manner when he should know, as an incumbent minister himself, that multi-million dollar deals cannot be agreed upon without ministerial consent,â he added.
Zafar also pointed out that checking the reliability and durability of imported items was the job of the railways technicians and experts who visited China several times and returned satisfied with the quality of engines Pakistan was preparing to import.
âThe decision to import the engines was taken after several meetings were held and all aspects of the deal discussed,â Zafar said, adding: âAll sides, from the financial to the technical feasibility of the project, were discussed and debated by an entire team which is why I cant understand why Haider claims that I am solely responsible for the deal.â
Zafar, who is presently heading NEPRA, was chairman of Pakistan railways when the deal was cut with the Chinese firm. Even though he was granted a two-year extension in his contract as chairman Railways and secretary ministry of Railways by prime minister Zafraullah Khan Jamali on the orders of General Musharraf, within a few months, Jamali himself terminated Zafarâs contract.
<b>Insiders say Jamaliâs ouster of Zafar greatly annoyed Musharraf who has close personal ties with the former railways chairman. Jamali also showed the door to Farhat Hussain, another close family friend of General Musharrafâs. Hussain was then the secretary ministry of labour, manpower and overseas Pakistanis. In fact, many observers believe that the ouster of these close friends of Musharrafâs was one of the causes of Jamaliâs fall</b>.
<b>A new development on this issue is that Pakistan will have to get German experts to fix the defective engines because the Chinese canât rectify their own machines. The help of Germans engineers has been sought to modify the exhausts of these engines in order to improve their performance. With US$100 million already spent on this project, insiders say a lot more money will be spent on this new contract with the German company. </b>
<!--QuoteEnd--><!--QuoteEEnd-->
What they will do with newly created station platform size?
FT
Ahmed Rauf
<b>Was the deal struck in 'good faith' as some PAC members seem to think?
The Public Accounts Committee of National Assembly is under serious pressure to revive the otherwise âsettledâ issue of the financial loss of over US$100 million Pakistan had to face because of defective railway engines it purchased from China (see TFT stories: âGermans called in to fix Chinese problemâ; August 19-25, 2005 and âRailways minister holds former chairman responsible for bad deal;â September 30 - Oct 06, 2005).</b>
The deal, struck in 2000, involves three retired army generals, two of whom are serving in the present government set-up. Lt-Gen Qazi Javed Asharaf is minister for education and Lt- Gen Saeedul Zafar is working as chairman NEPRA (National Electric Power Regulatory Authority, Pakistan).
<b>To recap, Pakistan railways and a Chinese manufacturing company struck a deal in 2000 for the supply of 69 locomotives to Pakistan at a cost of US$100milion. The 33 locomotives Pakistan received developed serious problems within a year of being employed on the tracks. They had to be withdrawn. The withdrawal of the engines from local routes caused substantial losses to the railways, forcing the ministry to suspend the import of the remaining locomotives from China</b>.
At the time the deal was struck, Lt-Gen Qazi was railways minister in Musharrafâs cabinet, Lt-Gen Saeed Zafar was chairman and secretary railways and Lt-Gen Butt was general manager Pakistan Railways.
The senate first took up the issue of the locomotives in mid 2005 after a PPPP (Pakistan Peopleâs Party Parliamentarians) Senator Dr Abdullah Riar pointed to it. After Riar brought up the issue and named Qazi as responsible for the deal, an inquiry report was compiled. The report said that Qazi had finalised the deal saying that the import of these new engines would revolutionise the railways system in Pakistan.
After a three-hour-long debate over the scam, the committee decided to form a sub-committee to further probe the issue and affix responsibility. Sources say the committee recently met and within half hour the issue was âsettled on very frivolous groundsâ, as a source privy to the committee meeting put it.
âPAC decided that although the deal was faulty and Pakistan had suffered losses, it [he deal] had been struck by the three former generals in âgood faithâ, something they could not be chided for. Hence the issue was settled once and for all,â said the source. However, other more conscientious PAC members are unhappy over the sub-committeeâs strange logic of settling a million dollar scam with such haste and nonchalance. These members want to press the issue.
âIâm wondering why this allowance to make decisions out of âgood faithâ was not available to politicians and civilians who are languishing in jails for misusing an official car while others get away for causing losses in millions?â asked a PPPP MNA.
MNAs Qurban Ali Shah and Qamar Zaman Kaira, members of the special sub-committee formed to review the matter, have confirmed that they will re-open the issue and get to the bottom of it. However, this has led to a sharp division within PAC: some members want the case to be forgotten while others are determined to follow it to its conclusion and restore PACâs credibility.
Strangely, the Auditor General of Pakistan has been silent and disinterested in the issue. At the recent subcommittee meeting, auditors sat around tight-lipped, not joining in the discussions. It was the federal secretary railways Shakeel Durrani who raised the most scathing questions. âLt-Gen Javed Ashraf Qazi was then minister of railways, Lt-Gen Saeed Zafar was secretary railways and General Butt was GM Railways. If you are serious in probing this issue, these three generals needs to be summoned and grilled,â said Durrani. Other PAC members did not follow up on this demand and remained quiet.
However, Durrani then contradicted himself by saying: âIf I were secretary at the time the deal was made, I would have re-advertised the tender to get more viable bids for the import of engines for Pakistani railways. This deal was struck because there was only one bid from China and we took it. This was the time right after the 9/11 attacks and no one was ready to offer Islamabad a loan. Given that, the only option left was to seek a loan from China and buy these engines.â
Surprisingly, this line of argument had everyone convinced; no one considered the fact that the deal with China was struck in 2000, much before the 9/11 attacks in 2001! Also, after the attacks, things began to improve for Pakistan: economic sanctions were lifted and financial aid started pouring in from Western countries and lending agencies.
Earlier, then-federal minister for railways Shamim Haider submitted the name of former chairman of Pakistan railways Lt-Gen (retd) Saeedul Zafar to the senate during a question-answer session on the scam. The question was raised by PML senator Kalsoom Perveen who wanted to know who was responsible for the purchase of engines from China on commercial and supplier credit. Her intervention was followed by a heated debate over the details of the deal, with most senators refusing to accept Haiderâs justifications for it.
Later, Haider, in a written reply to the senators, said that the deal, which has caused the country a major financial loss, was approved by Lt-Gen Zafar. However, observers say that being the railways minister himself, Haider should know that such deals cannot be finalised by the secretary or the chairman without the approval and consent of the minister.
âIt is unfair of Haider to hold Zafar accountable and not Javed Asharf Qazi who was the minister at the time. Obviously, the deal could not have been reached without Qaziâs knowledge,â said one observer. Expectedly, after the senate session was over, Zafar strongly disapproved of the official senate report in which he was singled out as being responsible for the deal with the Chinese manufacturers.
âThose accusing me of getting into a shady deal should not forget the circumstances in which the deal was finalised. At the time no country would lend a single penny to Pakistan. We were lucky that the Chinese were willing to get into such a deal with us and supply us with credit to buy the engines,â Zafar had told TFT. âI am shocked to see that the Railways minister has singled me out in this manner when he should know, as an incumbent minister himself, that multi-million dollar deals cannot be agreed upon without ministerial consent,â he added.
Zafar also pointed out that checking the reliability and durability of imported items was the job of the railways technicians and experts who visited China several times and returned satisfied with the quality of engines Pakistan was preparing to import.
âThe decision to import the engines was taken after several meetings were held and all aspects of the deal discussed,â Zafar said, adding: âAll sides, from the financial to the technical feasibility of the project, were discussed and debated by an entire team which is why I cant understand why Haider claims that I am solely responsible for the deal.â
Zafar, who is presently heading NEPRA, was chairman of Pakistan railways when the deal was cut with the Chinese firm. Even though he was granted a two-year extension in his contract as chairman Railways and secretary ministry of Railways by prime minister Zafraullah Khan Jamali on the orders of General Musharraf, within a few months, Jamali himself terminated Zafarâs contract.
<b>Insiders say Jamaliâs ouster of Zafar greatly annoyed Musharraf who has close personal ties with the former railways chairman. Jamali also showed the door to Farhat Hussain, another close family friend of General Musharrafâs. Hussain was then the secretary ministry of labour, manpower and overseas Pakistanis. In fact, many observers believe that the ouster of these close friends of Musharrafâs was one of the causes of Jamaliâs fall</b>.
<b>A new development on this issue is that Pakistan will have to get German experts to fix the defective engines because the Chinese canât rectify their own machines. The help of Germans engineers has been sought to modify the exhausts of these engines in order to improve their performance. With US$100 million already spent on this project, insiders say a lot more money will be spent on this new contract with the German company. </b>
<!--QuoteEnd--><!--QuoteEEnd-->
What they will do with newly created station platform size?