PAC summons CEOs of three major auto companies

ISLAMABAD: The Public Accounts Committee (PAC), taking notice of providing vehicles on ‘own money’ by auto companies despite receiving billions of rupees in advance from consumers, has summoned CEOs of three major auto companies of the country.

The Public Accounts Committee has formed a five-member inter-ministerial committee comprising five ministries to ensure the supply of vehicles in accordance with safety standards while directed the Auditor General of Pakistan and Federal Bureau of Revenue (FBR) officials to provide details of amounts and taxes collected from consumers by the auto companies.

The meeting of the Public Accounts Committee was held under Chairman Noor Alam Khan in which a briefing was given to the committee on the delivery of vehicles. The PAC directed all the concerned ministries to implement other safety standards for vehicles, including Euro-5. The PAC asked the Auditor General of Pakistan to check the accounts of auto companies and production capacity. The PAC also directed the FBR to provide details about the value of import of spare parts of vehicles.

Chairman PAC Noor Alam Khan directed that the Ministry of Climate Change should work on the implementation of Euro-5 standard while the Ministry of Science and Technology on safety standards. The officials of the Science and Technology Ministry told the committee that stakeholders must be called whenever a standard was set. The PAC also suggested that all vehicles without airbags, safety belts and brakes should be returned to the companies, otherwise action will be taken.

Objecting to the chairman committee’s scrutiny of auto companies’ accounts, PAC member Senator Talha Mahmood said that auto companies had made huge investments in Pakistan and they should not be harassed. Chairman PAC Noor Alam Khan said that they were not harassing the auto companies but only wanted protection of people.

Member PAC Sheikh Rohail Asghar asked about the number of car companies and how much foreign exchange goes out of Pakistan every year and to what extent were vehicles manufactured in Pakistan so far. Senator Mushahid Hussain Syed asked whether the security features have been installed in vehicles. Officials replied that 17 types of security features in vehicles will be implemented from July 15.

Chairman PAC Noor Alam Khan inquired whether there was a system for testing vehicles in Pakistan on which officials said the vehicles were tested in countries to which they were imported. The chairman PAC said that the performance of EDB was poor. “Explain how much public money auto companies have,” he asked. He said that no compromise will be made on the payment of taxes, including safety features in vehicles. Officials told the committee that the quality of the vehicles was the responsibility of the Ministry of Science and Technology. The Auditor General said that the auto companies have not produced as many vehicles as they have imported spare parts for the vehicles.

PAC Member Senator Shibli Faraz said that auto companies and dealers were involved in collecting millions of rupees as own money on vehicles. Officials from the Ministry of Industry and Production said that no company in Pakistan was making car engines.

Senator Shibli Faraz said that auto companies in Pakistan were operating like a mafia. “Why can’t engines be built locally here for the last 75 years,” he questioned. Chairman PAC Noor Alam Khan remarked that in 2010 these companies told the PAC that they would make everything locally, which has not happened till now. The officials of the EDB told the committee that the demand was less, so there was less manufacturing of the cars. Chairman PAC Noor Alam Khan said that the auto companies did not implement the agreements signed by them.

Chairman PAC Noor Alam Khan directed the FBR authorities to provide details regarding the import of spare parts of vehicles. He said that a company owes over billions of rupees to the people.

The CEO of EDB said that there was Euro-2 standard in Pakistan, on which the Chairman PAC Noor Alam Khan expressed his annoyance and said that all auto companies should adopt Euro-5 standards and if in this regard the committee will not take any pressure even from the prime minister’s office. “We will not tolerate any pressure and if anyone tries to put pressure on us, we will bring it before the media,” he said. The PAC directed to ensure compliance with international standards in vehicles.

Briefing the committee, the officials told the committee that according to the policy, advance is received as currently, the production capacity was 76,000 vehicles and it cost Rs20 billion. He said that auto companies are facing problems in Pakistan due to shortage of containers and chips.The PAC has summoned the CEOs of all the companies to the next meeting of the committee.