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. PTCLWorld 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 3rd 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.

Tech reporter with over 10 years of experience, founder of ProPakistani.PK


  • K.A

    I am surprised, who is right and who is wrong. But this is not unusual that every PPP govt. always had to face corruption charges, and they will never learn a lesson.

    But these are serious charges, but why he didn’t use his powers as Minister & why only writing letters ? If you are willing to eradicate corruption it shows itself.

  • listner

    The bureaucracy won. What is the good reason of appointing Secretary IT, Joint Secretary IT

    admin and Joint Secretary Development all Rtd army (Signal group) men. All of them were

    together in the army. It is a shame for the nation of Pakistan that they have no civilian for

    IT Ministry after destroying every department and Organization these retired army Col and Gen

    are now given the charge to destroy the IT Sector. What is their contribution for IT. The

    executive directors snacked by the Minister were the most corrupt and non IT & Telecom

    professionals.

    The honorable Secretary IT Rtd Col Najibullah Malik is the son in law of Gen Mujeeb ur

    Rehaman ex Secretary Information in Zia regime . He has served in Punjab Government and has

    brought bad name to the Government. He has provided services in Religious Affair (Hajjis

    quota) where everyone is aware of his great achievements for Hajji quota.

    There are only baseless roamers against the IT Advisor. What corruption he has done in four

    months, he is only trying to utilized the IT for the public services.The Minister Incharge is

    accused of having thoughts of placing his relative on a CEO post. Did he sack 4 Executives to

    get one post for his kin. He is removed from the charge on the basis that Secretary IT

    thinks he will do this and that what is on ground. People are accusing that he will do but

    have committed no crime so far in IT Ministry.

    Why the Ministry is so afraid of him, what they are hiding? We all know the progress and

    accusations on other Ministers. Does he has fake degree? Why the kind PM has taken action

    after knowing that he “might” do something wrong? What is the achievement of Ministry of IT

    and what is their contribution in last two years?

    We all know that IT has no share in providing services to the Citizens, the projects were to

    favour the big IT companies which all failed and no services for the Citizen. Do Retd Col

    Secretary IT would like to tell the Nation what is his achievement in the last two years in

    the Ministry of IT. He is not answerable to any of you. After his retirement he is enjoying

    full benefits of a Secretary and what is his qualification.

    Under his kingdom the IT Professionals are working as slaves. Do they have IT Cadre, job

    security, medical facilities or any reason to work for IT. Why should Secretary IT care, he

    is enjoying every facility after his retirement from army this country is for army and

    bureaucracy to suck the blood out of the veins of bloody civilian.
    PM should reconsider his decision and give some time to the Mr. Latif Khosa, let him do some

    cleanup.

    Ministry of IT should inform the nation what is their achievements in last two years.

    The IT professionals request the honorable PM to reinstate Mr. Khosa as Minister Incharge IT.
    My questions to the Secretary IT are:
    Universal Service Fund Company
    1. Why major chunk of subsidized projects was awarded to those companies who had their

    representation on the board of the USF Company e.g. PTCL and Telenor. PTCL got projects over

    7.7 billion, whereas, they never paid a single rupee, as they were required to commission

    83,000 lines in rural sector in-lieu of 1.5% of specified contribution by every licensee.
    2. Why CEO USF Mr. Perviaz was appointed without applying for the job and is still holding

    the position after expiry of his contract and has awarded 20 Billion Rs contracts.
    3. Why CEO of ICT R & D Fund Company awarded 33 out of 37 project without the consent of

    board and non of its project have any outcome.
    4. Why the hiring in the ICT & D is through the private sector, the employees were siding

    with their favorites for positions.

  • Dimensional

    Hi Nation,
    The dilemma with us is that from beginning our government has been a basket ball between civil government and army (no need to discuss why). The corruption is inside a single man- its not that someone is bloody civilian or army-man, or a politician or a bureaucrat.
    Whether it’s a country, or a cabinet, or a department in civil, government or military- The corruption is in oneself. So let us not discuss who mismanaged the funds in past or who has intentions to mismanage the funds in future.
    Though it is shameful that the person Incharge has to quit due to non-cooperative behavior of his subordinates and parallel running entities.
    Being a Telecom Professional and coming towards Telecom Policies, while formulating a Telecom Policy, cabinet has to look at many aspects and not only the betterment of an individual. In the Policies government has to look for revenue generation for government ( for RnD, Infrastructure Expansion etc.), profitability to the investors, a balance between Government operating entities and commercial operators, strength to the telecom infrastructure and a better cost effective service to an individual. Attaining all these is too tough and governments have been taking steps to adequately implement such policies.
    Result is that, today we have forgot to use landline and dial numbers via cell phone- it has become so cost effective just due to the steps which governments have been taking in past.
    We can install a radio Link in ISM Band at any place by paying a minor fee to government.
    Internet cost is as low as 1 Rupee Per hour.
    Internet is in cell phones and in the form of EVDO/3G WiMax we can roam around with a high speed data.
    We pay just 300,000/- Rupees to acquire a telecom license to operate throughout the country offering multiple services from single platform.
    We have commercial fiber operators in abundant quantity which are selling fiber high bandwidth links at 12000 Rupees per month per node and commission a link in less than 2 hours.
    PTCL’s Vfone is available in remote areas, even EVO services you can find in those areas where you cant find water!
    WHAT ELSE YOU NEED FROM GOVERNMENT IN TERMS OF TELECOM SERVICES???
    WHICH TELECOM LICENSE HAS BEEN RESTRICTED BY THE GOVERNMENT WHICH IS AVAILABLE IN WHOLE WORLD AND NOT IN PAKISTAN???
    WHICH SERVICE HAS UNAFFORDABLE RATES FOR CONSUMERS OR CORPORATE???
    Look at those countries where you cannot install a single radio link, no matter its in free band or licensed- Dubai, Kuwait, Europe etc. Even if you install an indoor WiFi in Dubai Internet City and your link is visible in available wireless links list of a neighboring office with higher signal strength, the neighbor complains and you have to reduce the output power of your indoor WiFi.
    Concluding, I must say that we can prosper 4 times faster if we remove corruption from any government entity!!!

  • was he eligible for this post??? I don’t think so.
    He should be fired.

  • Salman

    Reading the inane letter of Mr. Khosa to the President of Pakistan, one felt that if Mr. Khosa was a catholic he may be able to put up his application to the Pope for beatification, ASAP. Saint Khosa would sound good (apologies to my catholic friends!).

    Apparently the whole world around him is bad and corrupt: PTA, Ministry, the inhabitants of the Ministry, PTCL, Telenor, Mr. Wahaj (why was he elevated to this largesse, one does not know), cartels of telecom companies (wow! They are busy tearing themselves apart), grey traffic (hark ye! Are you going to get Rahman Malik into trouble again?), USF, R&D, all directors of all companies, all bureaucrats, everyone in this industry… all, but him and his cronies!

    I wish Mr. Khosa would have applied himself diligently in trying to understand what was happening and what needed repairs. Rather than accusing everyone of corruption and malfeasance and intent on skewering Pakistan like him and his ilk, he should have reflected and should be more intent on a ‘mea culpa’ rather than this ‘futue te ipsum’ attitude of showing how ignorant he really is.

    The Americans say, when in a hole, don’t dig. That applies to our other democratic leadership as well.

    If he (or whoever does his research and writing for him) would have just studied what the parameters were for in USF and done a bit of background research, they would have been a bit more sensible.This applies to the IT and Telecoms sector as a whole.

    I am sure if Mr. Khosa is invited to a public debate he would be able to either defend himself or show what the whole sham of the righteousness this is all about.

    For the bleeding hearts, just a small instance: the funds (that he or his henchmen were ostensibly after) have to be placed in short terms deposits after a transparent process of quarterly proposals from qualified banks. This is done by selection by a committee of which many government people are members of and Banks are selected who offer the highest returns (e.g. 12-13% as opposed to 8% of NBP where these would reside in default).

    Despte several requests Mr. Khosa did not want this committee to come together since he (or his ‘staff’) was interested in getting a kickback of 1.5% on these deposits. Quick money was to be made. Alas, this was not to be.

    In delaying this Mr. Khosa had caused a loss of over Rs. 380M to the Government. This is the difference in spread between the 8% and 12.5% margins as these funds are sitting in NBP by default since four months. Just because the ‘corrupt bureaucrats’ would not play ball and have the funds placed in a bank without competitive bidding and one whose capitalisation is not even to the extent of the funds which were being placed.

    Interestingly, so far the disbursement made to the different companies has been from this interest income, the principal has still not been used! The figures quoted in Mr. Khosa’s letter reflect ignorance or deliberate obfuscation.

    This is a response to just one line of his rather self serving and silly letter to the President.

    Are you up to a public debate just on each line of your letter Mr. Khosa?

    People ask me why do I care and am so passionate about these issues. Well, I have a vested interest: I am a knowledgeable Pakistani – at least in this sector. Hundreds of people like me have spent their lives to whatever we could to grow this sector despite all odds.

    If only these politicians can just spend some time and do something for Pakistan.

    Damned if we are going to stand by and see mass rape take place, specially if we are aware of the truth.

    Salman

    • an innocent paki

      hay dude.. do you think Mr. Khosa has mind to think or write all this….he is a clueless guy.

      these are someone from the industry who is not able to get benefit from long time and has access to khosa and planned to do something joint…

  • Muzammil

    Mr. Khosa has germs of corruption in his gene….i cant understand why he was now appointed as Musheer-e-khas of PM. He was always charged for corruption even as an attorny general or as IT ministor. He is just like a black sheep and has no sincere feeling for the country. Shame on him to say himself Pakistani…..he is not lesses than even a terriorist….SHAME KHOSA…..