By Wasim Iqbal

Copyright brecorder

ISLAMABAD: The management of Pakistan State Oil (PSO) received a stern warning from a parliamentary panel on Friday to settle a Rs 150 million liability with the Staff Welfare Organization (SWO) in four weeks, or face the referral of the matter to the Federal Investigation Agency (FIA) or the National Accountability Bureau (NAB) for recovery.

The ultimatum was issued during a meeting of the Public Accounts Committee’s sub-committee, convened by Tariq Fazal Chaudhry, which was examining the audit reports of the Establishment Division for the fiscal years 2003-04 and 2008-09.

The controversy stems from a piece of SWO land on Court Road, Karachi, measuring 14,256 square feet, where PSO has operated its Court View Service Station since 1962.

According to the audit report for 2003-04, the initial 30-year lease expired in 1992. Despite being under no obligation to renew the lease, the SWO management entered into a fresh 10-year agreement with PSO for a mere Rs 4,200 per month. This was done without calling open tenders through the press, a significant violation of procedure.

The audit highlighted that the prevailing rent rates for petrol pumps in the area were far higher than the nominal rate allowed by the SWO management, which rented out the site in a non-transparent manner, thereby causing a substantial loss to the government.

It was further revealed that the case relating to the irregular lease was pending before the Rent Controller of West Karachi, but the Audit pointed out that the department had not pursued the case.

The report noted that the petrol pump site was later leased out to PSO for 10 years through open competitive bidding at an initial yearly rent of Rs 33.9 million, with a 10 percent compound increase annually.

The PAC sub-committee’s warning hinges on the outstanding financial loss of Rs 150 million, holding PSO management accountable for settling the liability or facing an inquiry by the country’s top anti-graft watchdogs.

Copyright Business Recorder, 2025