PIA lost $113m in New York hotel investment

[Abbas Ali]

By Maryam Hussain and Mohammad Imran

ISLAMABAD: The Ministry of Defence has disclosed that Pakistan International Airlines (PIA) lost $113 million (over Rs 6 billion) on account of its investment in Roosevelt Hotel in New York during 1979-1995.

Top bosses of the Ministry of Defence and PIA have been summoned by the sub committee on defence of the Public Accounts Committee on Wednesday to explain the bad investment. MNA Riaz Fatiana will preside over the sub committee meeting. Members of the Saudi royal family were joint owners of the hotel and reportedly shared no profit with PIA.

The Ministry of Defence say that when the issue was brought to the notice of the PIA management, the PIA bosses replied that they were trying to get the investment ‘disinvested’ as apart from its financial investment and exposures.

A report of the auditor general of Pakistan submitted to the PAC also revealed that PIA paid Rs 2.922 million to settle claims from passengers whose baggage was lost or damaged from 1992-93 to 1994-95. The report adds that the “increasing trend of pilferage and theft of passengers’ baggage at PIA network warrants a through investigation”.

The Ministry of Defence said in its reply that cases of baggage loss were common in the airline industry and could not be eliminated completely. The ministry is also to explain irregularities in PIA affairs regarding extra charges worth Rs 12.596 million due to delays in the completion of jobs; medical expenses of Rs 37.865 million against budget provision of Rs 21 million; irregular payment of arrears of slip allowance in foreign exchange instead of Pakistani rupees, amounting to a $0.4 million loss; loss of Rs 2.6 million on account of defective and incomplete work; expenditure of Rs 0.9 million on rehiring of a retired pilot; recurring losses of 0.6 million Saudi riyal per annum due to not renting out utilised office space; and wasteful expenditures of Rs 0.356 million.

Source: Daily Times