PIA sell-off fiasco

EDITORIAL: Halloween, thirty-first October, a day celebrated for horror and associated with the macabre, cast its spell on the bidding for Pakistan International Airlines (PIA) scheduled for the day.

The question is no longer what went wrong in the process, but what if anything went right. A mere 12.5 percent of the minimum bid price of 80 billion rupees was offered by the sole bidder, — 10 billion rupees — a real estate tycoon who had no previous experience in this specialised business.

Credible reports from multiple sources revealed that the sole bidder did not have the liquidity to make the payment he offered, as he was overheard asking government officials if land value could be adjusted in the offer.

The Minister of Privatisation Aleem Khan, himself a very big real estate tycoon, defended himself by stating that the framework for the sale had been finalised during the caretaker set-up, a finalisation that was possible after parliament’s approval of the Shehbaz Sharif-led Pakistan Democratic Movement’s proposal tabled on 26 July 2023 of the 2017 Election Act, Article 230, lifting restrictions on the functions of the caretakers whenever circumstances exist that necessitate it to take actions or decisions necessary for the protection of Pakistan’s economic interests dealing with bilateral, multilateral agreements or projects already initiated under the Public Private Partnership Authority Act 2017, the Inter-Governmental Commercial Transactions Act 2022, and the Privatisation Commission Ordinance 2000. Business Recorder is vindicated, as it had opposed such blanket decision-making authority to the caretakers.

Aleem Khan’s diatribe against all former Privatisation Commission chairmen this Sunday past does smack of a lack of political integrity for having accepted a portfolio in the present setup given that he, as a former member of the Pakistan Tehreek-e-Insaf (PTI), had routinely criticised his present cabinet colleagues as being at worst corrupt and at best incompetent.

While political integrity is not a trait that is associated with our politicians yet given the fact that as the Chairman of the Commission he is by definition the one who can legitimately be held responsible for the bidding fiasco one would have hoped that he had tendered his resignation, which may or may not have been accepted by the prime minister.

The fallout of the bidding fiasco is even more disturbing than the bid itself. Former prime minister Nawaz Sharif proudly told the media while abroad that his daughter Maryam Nawaz sought his opinion on purchasing the airline and renaming it Punjab Air while buying brand-new planes.

If she reckons the province has the resources to purchase the airline then she needs to have a sit-down with the finance secretary, given that the province pledged to the International Monetary Fund a surplus of 342 billion rupees July-September 2024 — a target that has been missed by 182 billion rupees already.

If her intent was to purchase the airline by the family then she should heed the advice of Richard Branson, the owner of Virgin Atlantic Airways who once said, if you want to be a millionaire start with a billion dollars and launch a new airline.

It took around 200 million dollars of Branson’s own money to secure the rescue of Virgin — an industry known to have sunk many a fortune.

Khyber Pakhtunkhwa has formally indicated a desire to join the bidding process, with the intent to ensure that the airline remains a part of the national framework. KPK has even less available resources than Punjab and one would hope that the focus of both these governments shifts towards providing physical infrastructure and social services to their people rather than going into such adventures for which they neither have the finances nor the capacity.

There are numerous problems in proceeding with privatisation that range from lack of appropriate investment climate both within and outside this country, and a lack of a financial set-up that would absolve the new owners and/or the general public from interest payments on the massive losses that are parked in a holding company.

It may be recalled that the public is paying the interest charges in their tariffs that accrue from the previous government’s decision to park the circular energy debt in a holding company as well.

These are weighty issues that need to be dealt with; and finally, the tendency in this country to not hold past flawed policy decision-makers accountable must be abandoned in favour of accountability.

Only then will the country be able to attract men and women of integrity — both from an economic and political perspective.

Copyright Business Recorder, 2024