The Finance Ministry has rejected the request of Pakistan International Airline (PIA) management for an immediate bailout package, of about Rs 15 billion, because of financial constraints, it is learnt. Sources said that the management of PIA wanted immediate help of around Rs 12 billion to Rs 15 billion from the government as well as rolling over of debt of more than Rs 143 billion.
The liquidity of the PIA reported at Rs 26 billion is in negative, said a participant of the meeting. Finance Minister Dr Abdul Hafeez Sheikh has turned down the request of PIA high-ups and directed them to come up with the restructuring plan next week which would be taken to the Prime Minister. The Minister asked the PIA to present better face "so that someone could lend you".
The Finance Minister was quoted as saying that the government does not have money for PIA, but it could help it in borrowing from the market. An official said that the government is no longer in a position to give any money to any state-owned enterprise (SOE) from the current year budget because of fiscal deficit.
According to a statement, the Cabinet Committee on Re-Structuring of Public Sector Enterprises (PSEs), headed by the Federal Minister received a briefing on the national flag carrier, Pakistan International Airlines Corporation. The Finance Minister asked the management of the airline to come up with certain concrete and practical suggestions to remove bottlenecks and constraints in the way of the airline's development.
Earlier, the Managing Director of PIA, along with Secretary, Defence, gave a presentation to the Minister on the financial summary from 2001 to 2010 which included: operational expenses, revenue earning, affects of the increase in oil prices, excessive employment, the devaluation of Pakistani currency in capital market, and its impact on the overall financial conditions of the airline.
In the presentation, the management highlighted the requirements of the PIA in terms of financial support, and said that the airline had received no monetary allocation from the government since 2009, and in this regard showed the budget deficit. The meeting was attended by the Minister for Defence Ahmad Mukhtar, Minister of State for Finance Hina Rabbani Khar, Secretaries Defence and Finance and other officials.
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