Khosa Alleges Mass Corruption in IT and Telecom Industry

We know that Mr. Khosa was removed as Minister in-charge for IT and Telecom, in protest to which he had resigned being adviser to Prime Minister, which was not accepted by President Asif Ali Zardari.

It is yet interesting that Mr. Khosa presented his resignation to Mr. Zardari instead Prime Minister, his direct boss.

With his resignation to President Asif Ali Zaradri, Sardar Latif Khosa sent a letter alleging the top bureaucrats in the Ministry of Information technology with the help of cartel telecom industry were involved in illegal activities and corruption.

Following is the selected text of letter that was sent to President from Mr. Khosa and was made available for  ProPakistani.

Secretary IT along with Member Telecom, Member IT helping Cartels of Private Companies in illegal activities prevailing in Ministry of IT from last regime and were in continuation in this regime, with the help and support of bureaucracy.

I as Minister-in-Charge of IT took serious actions against malicious malfunctioning in different departments related with Ministry in best interest of Government and Citizens of Pakistan.

In USF Company, whose objective is to uplift telecommunication in the rural and under served areas, is practically high-jacked by the cartel of private companies and ministry officials those who are awarding contracts in access of billions to companies through subsidy contracts without any due-diligence.

Major chunk of subsidized projects was awarded to those companies who had their representation on the board of the USF Company as Board Directors i.e. PTCL, World Call and Telenor, amounting over 10 billions in one year.

Pressurized the Minister In-Charge to extend the tenure of existing CEO, for another 3 years against rules. It has been noticed that hiring & appointment of same CEO in 2007 were violation of rules.

Existing CEO USF Mr. Perviaz Iftikhar, whose tenure of appointment has expired, factually was hired through non-transparent process; as he was not even short-listed by the Federal Government’s committee mandated to do the job under relevant rules.

Mr. Farruk Qayyum (than Secretary IT), expressed and noted down serious reservations about this appointment. Instead of accepting the mistake, existing bureaucracy is desperately protecting the illegal appointment of the CEO and with backing of Secretary IT, even has tried to confront the Minister-In-Charge by siding with the board members from private sector.

So far, PTCL got projects over Rs 7.7 billion in USF, whereas, they never paid a single rupee, as they were required to commission 83,000 lines till 2008 in-lieu of 1.5% of specified contribution, which is obligatory on every other licensee.

Subsidy percentage exponentially rose from just 9% to above 80 %, whole process was very flawed and highly controversial. No audit of broadband subsidy projects has been done so far, it is only after probe by the Standing Committee of Senate that process for hiring of technical auditor has been initiated.ICT R & D Fund Company, whose objective is to promote R & D in ICT sector, was also high-jacked by the cartel of private companies and ministry officials those who were awarding contracts in access of millions to private companies through contracts without any due-diligence.

Board members of ICT R&D Fund Company were not nominated according to rules prescribed in Memorandum and Article of Association of the company. One board member was notified against provisions under relevant rules. Board members have never submitted conflict of interest Form, which is mandatory.

Contracts were awarded to companies those who were never in a position to deliver. There were billions of outstanding contributions with operators as liability according to Telecom deregulation Act.

PTA and Ministry of IT are instructed to receive all pending payments from operators at the earliest so that this money can be utilized for the intended benefits. PTA illegally placed 55 billion rupees of Ministry of IT in Federal Consolidated Fund, for which PTA was neither custodian nor it was PTAs money.

I directed Chairman PTA to get this money back to Ministry of IT and utilize it for the meant purposes. According to rules and regulations of Telecom Act, Auditor General of Pakistan should audit funds of USF and ICTR&D every year. Moreover, Ministry of IT has to send audit report to National Assembly as mandatory.

Since inception of funds, no audit was ever conducted. I directed Secretary IT to have a detailed audit of these funds by AG and submit the report to National Assembly for review and necessary guidance. Grey traffic is a menace; which is not happening without involvement of officials of MOIT and PTA.

Countries like India and Bangladesh have recently taken strict measures against grey traffickers and have fined millions of dollars to those companies/licensees found involved in facilitating or terminating grey traffic. In-spite of the fact that strict/penalizing measures were taken in our neighbourhood, our departments like PTA and MOIT never took / shown any interest and grey traffickers boomed.

I have proposed to the ECC to approve APC for Mobile operators. Since 2004, cellular operators were deprived of this benefit; resultantly no benefit to State as well as to operators was ever reported. It is pertinent to mention that I have taken the decision for good, as facts are not supporting towards APC for Mobile.

As local Loop licensees like PTCL who were benefiting from the APC regime, never utilized it for meant purpose e.g. subscriber base of PTCL has reduced to around 3 million with 100% surplus network capacity, thus no utilization of permissible APC. I have proposed for an automated system at PTA to monitor grey traffic i.e. International Traffic Clearing House.

As a matter of fact, the media drive is backed up by a de-notified member of ICT R & D fund, Mr. Wahaj Us Siraj, a person who is notorious for avoiding Content Filtering measures by the State, a measure which if taken would put tough challenge to his business association. His recent press briefing is evident of this fact.  I am proposing/taking exceptionally strong measures to implement content filtering software of international standard.

Benchmarks shall be content filters placed by the UAE-ETISALAT & South Korea-KT. If ETISALAT can implement these in UAE for good of local society there. There were clear evidence against Executive Director, EGD Mr. Amir Shehzad of illegal hiring, fraud and forgery in record, issuance of antedated appointment letters, alleged theft of official vehicle and termination of employees who have launched complaint of gross irregularities against him.

The Standing Committee of Senate on IT took serious note of these irregularities and asked me to suspend ED EGD immediately and launched an inquiry against him. He is absconder from inquiry from that day. I directed Ministry to forward summary of termination of ED EGD to Prime Minister. Contract termination summary of Mr. Amer Shehzad, sent to the P.M, has not been pursued by Secretary IT, despite clear directions.

Mr. Mustaq Bhatti, as Member Telecom is not a competent expert to deliver. He was at 3^rd place in the merit list at the time of his appointment. As Member Telecom, he is mainly responsible to deliver and maintain policies for the Telecom Sector, on the contrary, as already indicated above, our major policies have already expired and nothing is in foresight with his attitude and caliber.

He is being protected by the Secretary IT. Member IT, Mr. Tariq Badsha has been holding position since May, 2001.He has also done nothing to achieve the targets set under IT policy.

Worst, the National IT policy has also expired. He was assigned a task in 2004 to establish Federal Government Data Center by 2006 (a strategic project of extreme importance). He has wasted 6 years and 270 millions of the Government, so far nothing is on ground and money spent has gone wasted.

I ordered an inquiry to fix responsibility. I have also taken no time in deciding the future of the Data Center Project and have set on path to get it done through support of US government. He is also involved in contractual irregularities for procurement in many projects; most sensitive is E-Office for the Federal Government.

During the visit of the President of Pakistan to China in August,2009 a MOU was signed to provide soft loan amounting to 150 US $ to Pakistan to implement GOTA project. Similarly, project “Safe City” has taken lead, on right track and sailing smoothly through bureaucracy echelons. This is not acceptable at all, particularly where Head of State is even committed.Similarly, JICA (Government of Japan) offered a project to the Government of Pakistan, which is to be funded in shape of Grant-In-Aid for Coastal Communication Management.

Ironically, our bureaucracy is deliberately delaying it and we shall loose another friend/donor during prevailing hard times.

Mr. Nagib Ullah Malik Secretary IT, who remained chief custodian of government stakes for over a year, never escalated and pointed out these matters. Secretary IT, being the Principal Accounting Officer, is to be held responsible for this gross negligence.

Committees took strong notice of above mentioned happenings and probe by the constitutional entities is still underway. Committee members have also established that there is clear violation of rules, lack of due-diligence and conflict of interest at the part of board members appointed from private sector.

Telecom De-regulation policy, Mobile Cellular policy, Broadband policy and IT policy had already expired and all these require review/fresh formulation.

During routine briefings, I also noticed that important policy targets i.e. e-governance, e-commerce, anti-grey traffic, building knowledge based society, local content building, protecting and facilitating local investors etc were left unattended, principally these required State intervention.

I have already tasked for 2 days consultation event with the industry to consult and kickoff policies formulation process.

Recommended amendments in SRO of USF and got it updated, wherein contributors those who have conflict of interest OR are defaulters of contributions OR have failed to execute awarded projects cannot be part of USF Board .Directed to advertise the position of CEO USF to have open competition as law did not envisage extension of tenure. Used powers to allow the payments of scholarships to needy and deserving students with immediate effects. Delivery and watching the public interest and promote image of the government is prime concern.

Ordered for de-notification of the board members from private sector, as their appointment was violation of law / rules.  Directed the Ministry of IT to select the board members as per laid down procedures. Our government has to deliver; above-mentioned are facts of criminal intents and high incompetence.

I believe for betterment of nation and citizens of Pakistan. These elements be eliminated from Government without further delay, particularly Mr. Nagib Ullah Malik, Secretary IT should be removed. With such people at key positions, we cannot achieve our goals given in Pakistan People Party Manifesto.

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