IS NLC ON THE RESTRUCTURING ANVIL?
THE FREIGHTER HAS LOST BILLIONS OF RUPEES IN THE FINANCIAL SCAMS WITH THE CULPRITS GOING SCOT-FREE.
TARIQ AHMED SAEEDI
Mar 7 - 13, 2011
A recent meeting of the National Logistic Board has found great anomalies in the organisational structure of National Logistics Cell, Pakistan's largest freight handler. Dr. Hafeez Shaikh, minister of finance chaired the meeting and deliberated on the recommendations brought forth during the board meeting, which was astonished over the performance of the NLC and delay in preparation of its audit report. It has asked the NLC to get the audit report of 2007-08 updated from external auditor of high repute.
The question raised over the structure of NLC and its authorities seems to open up a Pandora box when final version and justification of NLC headed by army personnel would come to the public. At present, director general of NLC hails from the army, which is said to be in contrast to the standard rules, according to which Planning Commission has to determine authorities and responsibilities since it is the parent body of NLC.
Since the issue under the NLB's moot was organizational structure, Dr. Shaikh mildly said positions in the NLC were a subject to performance appraisal. The changing in the organogram would be definite when affairs and doers go berserk. If they do not perform well, he perhaps meant, civilian government has full right to set the house in order. Presently, the wheeling and dealing of the NLC is steered by military. The unclear division of authorities was scrutinised threadbare in the meeting along with the area of operations of the cell.
Poor performance of NLC is attributed to its diverting attention from the core businesses. It does not go right with the operational capacity of NLC to enter in the construction business, experts opined. The unnecessary expansion has led to the perennial financial losses the company has been suffering since long, thus shaping it into another white elephant for the cash-strapped government and miserly national exchequers.
The restructuring is expected to get the freighter rid of financial as well as administrative anomalies. The government has to sail against the wind to overcome the causes behind the current state of affairs of NLC: major of which is said to be a freighter pretending defence agency as Gen. Ashfaq Pervez Kayani, chief of the army staff, said.
The finger pointing at army is itself a feat in this part of the world where civilian governments used to grow out of the barrel of a gun. At the same time, it is rightly said the cases against serving military personnel get lost in the file rooms and their follow-ups are rarely discussed in public forum.
Last year, public accounts committee (PAC) was flabbergasted over the blunt revelation about loan scandal of NLC by none other than a senior official of NLC. It was reported widely in the media that how NLC disbursed loan of more than Rs70 million to a power generation private company without considering the repayment ability of the borrower. Two points popped up. First, why did a freighter give loan to any one? Second, if it did so then whether or not such a huge amount cam back. Auditor General of Pakistan informed PAC that the loan had far surpassed its repayment date of December 2007. It is an irony that NLC borrowed Rs4.3 billion during 2004 to 2008 from commercial banks and had to sustain a loss of Rs1.8 billion in capital market's investments.
The same top-notch official divulged, for some reason, before the PAC when the committee took the case on its dock, that two army generals involved in loan disbursement. The scam was besides other fouls play involving flow of NLC's money to buy luxurious vehicles and to fill the personal coffers. The loss was counted in billions of rupees and culprits were detected in the army's corridor. The names of retired officers of NLC were also associated with the financial damages meted out to the military-run entity. All the episodes end without climax and wrongdoers have gone scot-free to serve other government organisations. Reportedly, army chief also ordered an inquiry into the financial irregularities in NLC in November last. No inquiry report was made public since then. It is interesting to note that while planning commission, which is a civilian institution headed by prime minster, seems to remain out of the power distribution affairs of NLC, it is called before the PAC to explain the cell's position.
NLC is not in a financial stable state and reeling from financial crisis since last government. In fact, most of the cases belonged to the military regime. The cronyism in army is after all not dissimilar to civilian one; rather it may be more coordinated and deep-seated in the former institution because of its impenetrability to the outside world and its scrutiny.
Established in 1978, NLC was aimed at to improve the logistics management system in the country. It started its operation from Karachi. Soon after, the company has become the largest freighter claiming to be fulfilling multi-modal freight requirements of its clients. NLC manages a fleet of 1500 vehicles delivering 50,000 tons goods every day. Until 2009, the company has workforce base of 12,000 employees. At present, NLC includes civil engineering works as its core business, besides freight services, establishing and operation of dry ports and border terminals, manufacturing of rubber parts and retreading of tyres, and collection of toll taxes. Ever since August 1999 up to Sep 2009, NLC collected more than Rs15 billion revenue from toll for National Highway Authority, as per the NLC's report. Its polymers business, in the lights of numbers, is also performing impressively as its retreads more than 12,000 tyres per annum to meet the needs of its fleets and to supply them to buses. NLC has handled mega construction projects not only in Pakistan, but also in Qatar, Saudi Arabia, and Afghanistan. It has constructed multi-storey educational complex of 5 parts of Allama Iqbal Faculty of Arts, Kabul University, Nishtar Kidney Centre, Sir Syed Postgraduate Science, Nangarhar University, etc. The company also monitors Afghan trade.
If restructuring is to improve the financial state of the company, it should be done at once. Those who dragged it to near financial disaster must be tried in the courts.