CORRUPTION AT HIGHEST LEVEL AT SNGPL

“AN INSIDER STORY”



I feel it my duty to bring to the notice of public if something wrong is under way in a Public Limited Company like Sui Northern Gas Pipelines Limited (SNGPL). After deep thought and finding no other way to bring to public some facts about SNGPL affairs, I decided to write to you people as you have direct access to public and you do share the responsibility to inform the public about the things of their concern that are in your knowledge. If there are some forums available in Pakistan which are accessible by everyone intending to point out flawed practices at some place, then I am sure that we will not reach the point that we have to chase fraudulent elements when they flee after making a good bank balance out of public money. However, in absence of such platforms and laws that encourage whistle blowing, the stories of corruption are known to public only when wrong has been done and we do nothing except crying over spilt milk. In this story you will find not only the things that has taken place but also those actions that are to be taken in near future. So, do remember the date of this information being conveyed to you – 05-02-2013.

There are many corrupt practices that are undergoing at Sui Northern Gas Pipelines Limited (SNGPL). A brief about the Company as how it operates will be helpful to you to understand the corrupt practices. SNGPL is a Public Limited Company with majority shareholder being Government/ Government controlled institutions. Its Head Office is located at Lahore. It is controlled by the Board of Directors (BOD) which has 14 members and majority of which is Government nominees. The other directors are from private sector companies like Dawood Hercules, MCB etc. owing to they being big shareholders of SNGPL. As such, this Public Limited Company has directors that are limited to Government nominees and industrialists. There are four main committees of Directors and Management to formulate policies of the Company that are later on ratified by the BOD. These committees meet from time to time and the BOD also when required. The first step of bribing starts from here, meeting. Every director coming to attend a meeting is given Rs. 50,000/- as meeting allowance for each day of the meeting. Although, this should be an honorary office and only the travelling and boarding expenses of directors visiting from out of Lahore may be borne by SNGPL.

In theory, Board of Directors appoints a Managing Director to run the affairs of the Company and is at top of the Managerial Hierarchy. In practice, only a nominee and favourite of the Government is appointed as MD. The present Management; that I mean is the Managing Director as it is he being a dictator in a Public Limited Company, has pushed the Company at the brink of disaster. The selected MD; especially the present one goes to any limits to bow to unlawful and corrupt demands from Government just to save the positions of being a MD. The true picture will be available before everyone after two to three years as the actions of current MD will ripe some fruit by that time which will have such bitter taste that every Pakistani will have to suffer.

Pakistanis are facing the Energy Crisis that will deepen in future despite all claims and theoretical efforts from Governments and the Managements of the Energy Utility Companies especially SNGPL. The gas shortage will increase with the price of the available meager natural gas. The major cause of increasing gas prices is not its demand – supply gap, rather it can be attributed to the corrupt practices prevailing in the Company that increase the operating cost manifold. I will try to point out some of the practices that are being done at SNGPL. These are not mere allegations but also provide the examples (though not in detail owing to hiding the identity of the writer) and these can be verified if authorities like Ombudsman, NAB and most importantly the Judiciary makes some investigations in this regard.

1) Gas Supply to New Towns Even Villages is a burden on the Company finances as all such projects of expansion of network are financed by the Company resources and Government only contributes 20% of the total cost from the head of Development Budget. There is no logic in expanding the network when SNGPL is unable to meet the demand over its existing network. In addition, the expenses on inauguration ceremonies of new gas network at new towns and villages costs the Company Rs.3.0 Million minimum and this cost is solely born by the Company and all such inaugurations are attributed to some political personalities as if he has paid out of his pocket to fund such project.

2) Priority of installation of Gas at premises of new consumers – the MD kills the merit by giving priority on recommendations of some politician or bureaucrat from Ministry of Petroleum & Natural Resources. If a consumer has no links available, then he cannot have gas connections within three years from the date of submitting the application. Although the judiciary has forbidden the MD to give priority in the past, but still MD is using his position to oblige the high ups in the Government and the Ministry by getting the new connections installed in much lesser time. This practice has contributed to development of a mafia that offers to get early connection installed on payment of Rs. 50,000/-. There must be some share that is given to officials of the Company including the MD for such early connections.

3) Increasing gas theft – Current MD talks a lot about controlling the corruption in the Company especially the gas theft. However, he has been instrumental to increase the volume and amount of gas theft during his tenure. This can be seen by comparing the data from the date he assumed the office, and the current data. The gas connections of the Industrial Consumers involved in gas theft are not severed. There have been cases when the officials who tried to severe the gas connection to some industry involved in gas theft, he is not only verbally abused but also transferred to far away locations. The expenses on gas theft control efforts have increased under different gas theft control plans, however the result has not been much promising due to lack of commitment from MD. The data can be obtained from SNGPL in this regard as to what were the total expenses in the year 2008 on gas theft control and what are at present. The increase does not justify when compared with the results.

4) The most heinous corrupt act of current MD – Mr. Arif Hameed is recruitment of employees without having any concern to merit. Such employees are burden on the Company as they are less productive and are also involved in illegal actions like gas theft and misappropriation of Company resources. Here one can claim that the MD is under the Board of Directors who keeps a check over his actions and no recruitment can be made in deviation of the Company policies. There are ways that such actions are done under the cover of legitimacy. Following points may help you to understand the mode of action of Mr. Arif Hameed.

o Policies regarding the human resource are approved by the Human Resource Committee (HRC) of the Board of Directors. The MD has bribed the Chairman of HRC (Mirza Mahmood of Minto Law Firm) by presenting the policy of application of TA / HA and training for the members of Board of Directors in the foreign countries on the Company’s expense. This policy was never heard in SNGPL but it has been approved and the Chairman HRC has travelled abroad on Company’s expense to attend a training session that had neither any link with the Company Business nor the directors have any direct role in day to day functioning of the Company that they need to be trained in any area. Such favors given to directors allow the MD to get approved HR related policies of his own choice from them.

o In Jan., 2011, the Company advertised various positions in the National Press and recruitment was made after test from National Testing Services (NTS). However, as the individuals whom the MD wanted to recruit could not be shortlisted, he ordered recruitment through Head Hunters too. The advertisement for hiring of individuals through Head Hunters was published in Sep., 2011 and there was no short listing criterion and no recruitment test was taken. As such the individuals who could not even get shortlisted for test in the recruitment through NTS were able to be recruited through Head Hunter. Examples of recruitment on recommendations / references from amongst many are Mr. Salman Khan S/O Khan Muhammad Hussain Azad (Advocate and District Attorney, Bahawalpur) – a throughout 3rd divisioner (he applied against both the advertisements but he was not short listed for test even in the recruitment through NTS. However, in later advertisement, he was not only short listed but selected as well), Mr. Furqan Basit, Mr. M. Nauman, Mr. Mehmood Iqbal, Mr. Ahmad Sohail Khakwani, Mr. Ikram ul Haq, Javed Hussain, Mr. Ali Hamza (for him a rule of having minimum 16 years education was also amended and candidate having 15 years education from abroad were also considered for selection as executive), Anwarullah, Mr. Safdar Wazir, Miss Aroosa Akbar and Mr. Bashir Bilal Cheema, Syed Mahmood Abbas Gillani, Miss Zily Huma, Mr. Asif Adeel Rao, Mr. Jehanzed Ahmed (relative of Suhail Ahmed from Media and he was selected without applying and interview), Zaheer Ahmad and Ayesha Khan. Overall there were 450 individuals recruited as executives and 1290 subordinates. Both the recruitments (through M/s NTS and Through Head hunter) were finalized in March, 2012. The recruitment in the period of Mr. Arif Hameed has been mostly without merit and the name lists of individuals to be selected are given before finalization of merit. As such, the numbers awarded by the interview committee are changed to bring the names in lists from MD to the top of merit lists.

o The actions taken by current Management can be termed as Pre-poll rigging as more than 500 jobs has been given in 2012 to individuals nominated by the President House. The appointment letters were delivered to Ms. Talpur by Company officials on orders of the MD.



o It can be ascertained from any officials of SNGPL who have been part of the selection interview committee that they are not allowed to give marks with pen. They are ordered to fill the interview assessment sheets with lead pencils so that these can be changed as per wishes of the MD at a later stage. In January, 2013, SNGPL has hired 150 individuals in subordinate cadre through Blood Relations Quota. The interview assessment sheets of the selection interview committee members have been destroyed and they have been forced to sign the composite merit lists made as per lists given by Mr. Arif Hameed.

o In 2013 the Company has hired an individual named Waseem Ahmad as Chief Officer in HR Operations Department. This individual had applied against the advertisement of General Manager, however he was not shortlisted initially as he did not meet the criterion of General Manager as advertised. Mr. Arif Hameed should be asked that if an individual did not meet the criteria as per advertisement then how was he even short listed rather than selected. Such shortlisting must have followed the stage when all the candidates who meet the advertised criteria has been interviewed and found not suitable. Then the candidates who fall short from advertised criteria in some respect could be checked. However, Mr. Waseen was selected without following this procedure.

o The Company has again advertised the positions through the Head Hunter named NCBSM. The list of candidates that are to be selected has been given beforehand although the test is yet to be held on 12-02-2013. The list includes the following names:



§ Mr. Amir (relative of Maulana Fazul Rehman)

§ Ms. Saman Altaf (relative of bureaucrat Mr. Qaqsim Raza Affendi)

§ Ms. Ayesha Ajam (known to Mr. Arif Hameed)

§ Haseeb Bhandar

§ Salman Khan

§ Mahwish Khaliq

§ Sana, Amina

§ Rubina Saadi

§ M. Irfan

These are few names from the list that contains 18 names.

5) The Detection and Evaluation Committee is formed at the level of Head Office to function as deciding forum for gas bill amount of consumers who are involved in gas theft and / or have increased the pressure of gas than documented with the Company. The amount of bill calculated by the officials on the basis of site survey and gas usage pattern is required to be paid by the consumer. However, if the consumer has some links, then he takes his case to this committee and gets relief even to such extent that 80 % of his calculated bill is waived off. The data in this regard can be obtained from SNGPL as to how much amount has been waived off by the Detection and Evaluation Committee.

6) Favor being given by the MD to some hospitals and laboratories to refer the Company employees for treatment from there. Previously, most of check ups were conducted from Shoukat Khanam Labs which are having state of the art equipment and are authentic. However, presently the preference is being given to Alnoor lab that is being run by friend of the MD.

7) The new pricing formula has been agreed from OGRA. At the first place there should be no regulatory authority over SNGPL as there are already Government Nominated Directors available in its BOD. Then the presence of OGRA just to regulate the monopoly gas company is not understandable. However, as per current pricing formula, the slabs has been reduced to three and consumers will have to pay the price of whole gas they consumed as per highest slab corresponding usage. It can be understood by example as:

o Slab 1 = 1 Hm3 or less @ Rs. 200/-

o Slab 2 = 2 Hm3 @ Rs. 350/- per Hm3

o Slab 3 = 3 Hm3 @ Rs. 500/- per Hm3

If gas consumption is 2.5 Hm3 then the bill will be Rs. 1250/- (2.5 x 500 i.e. the rate of highest slab).



Mr. Arif Hameed is using carrot and stick policy. He threatens the honest officers times and again for adverse actions and stopping their annual increments. On the other hand, he offers his services to all politicians for any kind of illegal actions. This is the reason that he is not facing any opposition from the officials of the Company and can do anything he wants just like a dictator having command of Army can do anything in the country.

You are humbly requested to give a serious attention to above mentioned facts about the largest Natural Gas Utility Company of the Country unless it is too late that SNGPL falls to the same level as are other ruined public limited Companies like PIA and Pakistan Steel Mills.

I cannot disclose my name at the moment. However, if investigations are started and there is need to disclose name, I will present myself before the investigating authorities.