ISLAMABAD: On Wednesday, a parliamentary panel urged the prime minister and the finance minister to immediately halt the Federal Board of Revenue’s (FBR) “scandalous” acquisition of more than 1,000 cars for its officers, given the Rs384 billion revenue shortfall in the first half of the current fiscal year.
In order to prevent further embarrassment for the government, the prime minister and the finance minister were urged by the Senate’s Standing Committee on Finance, which was chaired by Saleem Mandviwalla of the Peoples Party, to revoke the purchase orders that the FBR had issued to a single car assembler without any bidding and to take action against the individuals involved.
Rashid Mehmood Langrial, the chairman of the board, made a special request, and Prime Minister Shehbaz Sharif recently approved the purchase of 1,010 cars for FBR staff to increase their operational efficiency.
Senator Faisal Vawda brought up the issue, criticizing the FBR force’s car purchases that were unrelated to performance and that fell well short of the Rs384 billion revenue collection target. He claimed that only if the recipients could recover at least half of the deficit could the Rs6 billion car purchase be justified. He went on to say that if they don’t, they should be penalized rather than rewarded.
One company received an order to purchase more than 1,000 cars without any bids.
He recalled that the cabinet’s Economic Coordination Committee (ECC) approved the purchase order for 1,010 Honda cars on the same day (January 10) and that no other assembler was even given a chance to bid or be considered. “This is a scam and should be stopped as soon as possible,” he said.
The senator said that just one assembler could fit through the full procedure because of its design. “This has been done with bad intentions and has blatantly created opportunities for corruption.”
According to Mr. Vawda, the only reason the offer was turned down was because Toyota’s automobiles were 1328cc, but the FBR proposal called for vehicles up to 1300cc. Toyota had also offered lower prices, higher specs and add-ons, more fuel efficiency, and a longer after-sale warranty.
According to him, electric cars need to have been taken into account as well, and other companies like Hyundai and Nissan ought to have been given an opportunity to present their bids.
He stated that the relevant officials ought to be questioned and held accountable.
“This is really upsetting and needs to be stopped,” Mr. Mandviwalla stated.
The procedure “appears to be tailor-made,” according to PML-N senator Anusha Rehman, and the finance minister ought to halt it right away.
After failing to convince the Senate committee of the FBR’s justification for purchasing these vehicles, the head of administration was subjected to intense questioning.
According to him, technical and procurement committees were established in order to buy these cars. The procedure was started several months ago and wasn’t completed all at once. He asserted that direct contracting was permitted by the procurement regulations.
The committee members questioned why the purchase order was made quickly, why other companies were not allowed to compete, and why the ECC summary only included automobiles up to 1300cc.
Saleem Mandviwalla stated, “It appears that the 1300cc condition was mentioned by design,” and the procedure was widely criticized on social media. He added that he had spoken with Ali Pervaiz Malik, the Minister of State for Finance, about the issue and that he had agreed to look into whether the regulations had been followed.
According to the laws, the ministry cannot prevent the board from buying these vehicles because the board operates under a different revenue division that is led by the FBR chairman himself, a senior finance ministry official informed the committee.
State-owned businesses
The State-Owned Enterprises (Governance and Operation) (Amendment) Bill 2024, a private member bill, was subsequently taken up by the committee. The body unanimously approved the bill, which was introduced by Senator Anusha Rehman. It aims to provide clearer rules for state-owned enterprise (SOE) governance and operations.
Section 3(1) of the SOE Act 2023, which states that the act applies to all public sector corporations (PSCs) and other corporate bodies under federal administration, was the main topic of discussion.
It was mentioned that organizations with less than 51% of their shares held by the federal government are exempt from the regulation.
Senator Anusha Rehman emphasized the need for clarity on the definition of SOEs, particularly in cases where privatized entities continue to face legal ambiguity regarding their status, while the finance ministry contended that the current clause was adequate to address concerns regarding the privatization of PSCs.
In some situations, SOEs are permitted to buy shares of a publicly traded company, increasing the government’s stake to 51%. Senator Anusha noted that private investors encounter difficulties in these situations.
According to Senator Farooq Naek, “as legislators, we should make laws that evolve with changing times to benefit the public at large.” The bill was unanimously passed by the committee.
