The stand-off between PASHA and PSEB needs to be solved on the top priority basis


July 15 - 21, 2002

The software-driven IT industry of Pakistan is reeling from a full blown war between the Pakistani Software Export Board (PSEB) and Pakistan Software Houses Association (PASHA), the representative body of about 150 software development houses across the country. The later has expressed dissatisfaction at massive irregularities, maladministration and conflict of interest in the PSEB and has demanded the inclusion of its members as directors in its board so as to have a representation in the Board.

A meeting held in Islamabad between a delegation led by President of PASHA, Hamza Matin, and Minister of Science and Technology, Dr Ataur Rahman, last week remained unable to solve the conflict which revolved round PASHA's demand for the removal of a number of officials, including some of the top ones. A source who attended the tempestuous meeting told on the conditions of anonymity that 'PASHA demanded the removal of the minister, advisor, secretary, PSEB chief and many others for the rampant corruption, maladministration and conflict of interests.' According to the source 'the minister advised PASHA to curtail its negative publicity against and promised to investigate the matters as per the due process.' The source also said that the minister asked PASHA 'not to throw the dirt as it will have a negative impact on the national software industry.'

The stand-off between PASHA, the representative body of software houses and PSEB, the organization formed in 1995 by the government with the singular aim of finding foreign markets for the locally developed software, certainly does not augurs well for the nascent software industry of Pakistan. It is also having a detrimental impact as the precious energies and time of the two most important organizations associated with the software are wasted in accusations and counter accusations instead of being spent on more useful purposes.

PASHA has accused the high officials of the PSEB, including its managing director, of indulging in practices which serves their own interests instead of the interests of the software industry as a whole. It alleged that on the very first day of his appointment, the MD signed a service contract with his own software company to provide consultants for managing/monitoring and designing any IT related projects and for evolving market strategies in the country and abroad. According to the contract effective December 1 last year for a period of one year, the PSEB agreed to pay Rs 500 per hour for consultant for managing/maintaining and designing projects while senior consultants for marketing strategies were to be paid Rs 700 per hour both not exceeding 8 hours a day.

According to documents available with PAGE, a Special Audit Report by Auditor-General of Pakistan on PSEB found a number of serious irregularities totaling Rs 38.549 million from July 1998 to May this year. The report said that it noticed misuse of power in various cases as well as common violation of rules and propriety, particularly in the area of foreign travel.

The Report said the total financial impact of violation of rules, primarily the awarding of projects or jobs of Rs 25,000 and above without floating tenders in violation of the government's rule, alone totalled Rs 14.8 million. This included irregular purchases totalling Rs 3.2 million, irregular award for the construction of STP Lahore valued at Rs 425,900, irregular expenditure of Rs 1.188 million of foreign tours and payment of Rs 123,809 on account of insurance premium to a private insurance company, etc.

The Report puts the total financial impact on account of negligence at Rs 16.7 million, all of it between February 7 till May this year. The expenditure include Rs 8.1 million, $ 82,448 , Pound Sterling 38,008, and Singapore Dollars 26,100. The Report said that "It is pertinent to mention that all these payments were made against the projects proposed by the PSEB against which the Government of Pakistan has released no funds. The management of PSEB made these payments out of the Grant Account. Expenditure against projects having no funds is serious irregularity."

The 49-page Report comprised 11 paragraphs on 'corruption, fraud, misuse and thefts'; 15 paragraphs on 'violation of rules'; 3 paragraphs each on 'negligence', 'over payment' and 'recoverables'; and two paragraphs on 'over payment'. The Executive Summary of the Report said that the 'Misuse of powers was noticed in various cases. A case in point was the purchasing on an over invoiced vehicle. In this matter the controlling ministry needs playing a more proactive part.' It also noted that 'Violation of rules and propriety were common' and expressed concerns that the 'loss to Government was evident in the shape of imprudent methods adopted to enter into service agreements and make purchases.' It also expressed concerns that 'There was a problem with the maintenance of record. Crucial cash books and bank accounts were needed to streamline documentation specially in the area of asset stock registers etc.'

The stand-off between PASHA and PSEB which has resulted in the direct confrontation between the software development houses and the Ministry of Science and Technology needs to be solved on the top priority basis. It is all the more necessary as for the software-driven IT industry like Pakistan a delay means waste of precious resources, energies and time on both the side at the cost of the industry.