Pakistan auctions cars in austerity drive
The auction has been billed as part of Imran’s drive to give ‘the nation’s wealth to its rightful owners’
People look at used luxury cars displayed at the Prime Minister Imran Khan’s house during an auction yesterday. Auction official Mohammad Asif told Reuters the vehicles could bring in about Rs2 billion ($16 million) to the cash-strapped government’s coffers, although that estimate depends on finding buyers for four bullet-proof Mercedes.
Pakistan’s new government yesterday began auctioning off about 100 government-owned vehicles as part of new Prime Minister Imran Khan’s highly publicised cost-cutting drive.
Auction official Mohammad Asif told Reuters the vehicles could bring in about Rs2 billion ($16 million) to the cashstrapped government’s coffers, although that estimate depends on finding buyers for four bullet-proof Mercedes, estimated in value together at Rs1 billion.
The auction has been billed as part of Khan’s drive to give “the nation’s wealth to its rightful owners”, though critics say most of the new government’s cost-cutting measures are more symbolism than significant savings.
Former cricket star Khan, 65, who took office last month has promised to cut costs, including trimming the motorcades of government officials and selling public land.
“It is a change of mindset,” Khan said in a speech on Friday. “I will be counting every single rupee I have to spend on me.” Khan’s austerity vows, however, have been undercut by his near-daily helicopter commute from his home in the hills above Islamabad.
Critics say the cost-cutting has been mostly cosmetic. “There is nothing new in the current austerity drive,” said political commentator Raza Rumi.
Auctions of ageing government vehicles, for example, have taken place for years, though not so publicised.
The 36 Mercedes and BMW vehicles was a larger number than at previous auctions — and the sale offered bulletproof luxury sedans estimated to be worth Rs250 million (about $2 million) each.
Still, nearly three-quarters of the 101 vehicles on offer were more than 10 years old, some noticeably knocked about. Two were 32-year-old Toyota Corollas. Even if the auction were to bring in its projected Rs2 billion, that is a drop in the bucket compared with the government’s Rs5.9 trillion ($48.19 billion) budget, which projects a Rs1.7 trillion in deficit spending.
Painful conditions
Still, Khan’s information minister, Fawad Chaudhry, said even symbolic steps were important for building national unity.
Public morale may be important in the coming year as Pakistan could face painful conditions for foreign financing to address dwindling foreign currency reserves and a ballooning current account deficit.
Chaudhry argued that small cutbacks can add up. “If you try to see its effect on the GDP, it is small, but in numbers, it is not small,” Chaudhry told Reuters.
Still, public reaction to the austerity drive has been mixed.
When the new foreign minister, Shah Mehmood Qureshi, announced he would not fly first class, only business class, when travelling abroad, many pointed out that this was already the case under the previous government.
Other early ideas — including Khan’s vow to cut more than 500 staff from Prime Minister House and establishing a six-day work week for civil servants — were shelved as unworkable.
In particular, Khan has been mocked by some for taking a helicopter into Islamabad most days, after publicly declaring he would eschew motorcades and declining to live in the official prime minister’s residence.
Information Minister Chaudhry said the helicopter commute used less fuel than a motorcade, at one point arguing that it cost only Rs50 (40 cents) per kilometre.
That calculation provoked fresh ridicule. “Why don’t you stop metro bus service and instead let people enjoy the cheap helicopter rides?” quipped a TV host.
In fact, the eight-seat helicopter Khan uses costs about Rs200,000 ($1,633) per hour factoring in fuel, crew, maintenance and safety inspections, according to Syed Naseem Ahmad, president of the Society of Air Safety Investigation Pakistan.
Rs2b
expected to be raked in by sale of luxury cars from PM’s House
Rs200,000
per hour is used by PM’s helicopter factoring in all costs