ISLAMABAD: A parliamentary panel asked the prime minister and the finance minister on Wednesday to immediately stop the “scandalous” purchase of over one thousand cars by the Federal Board of Revenue (FBR) for its officers at a time when there is a revenue shortfall of Rs384 billion in the first half of the current fiscal year.
A meeting of the Senate’s Standing Committee on Finance, presided over by Saleem Mandviwalla of the Peoples Party, called upon the prime minister and the finance minister to reverse the purchase orders hastily issued by the FBR to a single car assembler without any bidding and take action against the individuals involved so that the government does not face more embarrassment.
Prime Minister Shehbaz Sharif had recently approved the purchase of 1,010 cars for FBR officers to improve their operational efficiency on the special request of Rashid Mehmood Langrial, the board’s chairman.
The matter was raised by Senator Faisal Vawda, who criticised the purchase of cars for an FBR force, without any linkage to performance, which had missed the revenue collection target by a big margin of Rs384bn. He said the purchase of cars worth Rs6bn could be justified only if the beneficiaries could recoup at least half of the shortfall. If they fail to do that, they need to be punished instead of being given rewards, he added.
Order to buy over 1,000 cars was issued to a single firm without any bidding
“This is a scam and should be stopped as soon as possible,” he said, recalling that approval from the Economic Coordination Committee (ECC) of the cabinet and the purchase order for 1,010 cars from Honda was issued the same day (Jan 10) and no other assembler was even considered or given a bidding opportunity.
The senator said the entire process was designed in a manner that only one assembler could fit in. “This is ill-intentioned and, very shamelessly, doors for corruption have been opened.”
Mr Vawda said Toyota had offered lower rates, better specifications and add-ons, greater fuel efficiency and longer after-sale warranty, but the offer was rejected only because the company’s cars were of 1328cc, whereas the FBR proposal specified vehicles upto 1300cc.
He said electric vehicles should also have been considered and other firms like Hyundai, Nissan given a chance to come up with their offers.
He said the officials concerned should be questioned and taken to task.
“This is very disturbing and should be stopped,” said Mr Mandviwalla.
Anusha Rehman, a PML-N senator, said the process “appears to be tailor-made” and the finance minister should stop it immediately.
The Senate committee grilled the FBR’s head of admininistration after he failed to satisfy the body about the rationale behind purchase of these vehicles.
He said procurement and technical committees were formed for the purchase of these vehicles. The process was initiated many months ago and not done suddenly. He claimed the procurement rules allowed direct contracting.
The committee members wondered why the summary to the ECC specified vehicles upto 1300cc only, why other companies were excluded from the competition and why the purchase order was issued in haste.
“It looks like the 1300cc condition was mentioned by design,” said Saleem Mandviwalla, adding that social media was rife with criticism of the process. He said he had also discussed the matter with the Minister of State for Finance, Ali Pervaiz Malik, and he agreed to examine whether or not rules had been followed.
A senior finance ministry official told the committee that under the rules, the ministry cannot restrict the board from purchasing these vehicles because the latter worked under a separate revenue division, which is headed by the FBR chairman himself.
State-owned enterprises
The committee later took up a private member bill, the State-Owned Enterprises (Governance and Operation) (Amendment) Bill 2024. Presented by Senator Anusha Rehman, the bill met unanimous approval from the body. It envisages clearer guidelines for the operation and governance of state-owned enterprises (SOEs).
The key debate centred around Section 3(1) of the SOE Act 2023, which specifies that the act applies to all public sector companies (PSCs) and other corporate bodies controlled by the federal government.
It was noted that the law does not apply to entities where the federal government’s shareholding is below 51 per cent.
While the finance ministry argued that the existing clause was sufficient to address concerns regarding the privatisation of PSCs, Senator Anusha Rehman emphasised the need for clarity on the definition of SOEs, especially in cases where privatised entities continue to face legal ambiguity regarding their status.
In some cases SOEs are allowed to purchase shares of a listed company taking government shareholding to 51pc. In such cases, private investors face challenges, Senator Anusha observed.
“As lawmakers, we should make laws that evolve with changing times to benefit the public at large,” Senator Farooq Naek said. The committee agreed, passing the bill with consensus.
Published in Dawn, January 23rd, 2025
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