ISLAMABAD: Privatisation is the only way forward for sailing out financially ailing Pakistan International Airlines (PIA) for which necessary steps including policy have been formulated and the next government have to implement as the PIA’s financial losses are touching skies, Federal Minister for Pakistan Railways (PR) and Civil Aviation Affairs Khawaja Saad Rafique said.
Talking to media persons here during a special session, the minister said that the government has approved the new aviation policy aiming at making PIA financially viable and attracting potentially huge foreign and local investment.
He said that the government of Pakistan is to privatise PIA by unbundling, adding job security of present staff working in the national carrier will be ensured. He said that the government in-principal has decided to outsource Islamabad, Karachi, and Lahore airports for a period of 15 years, saying this will enable PIA to be financially independent and better serve the nation.
He said that the policy will also help in the promotion of the domestic aviation industry, attract private investment for the management and development of new airports, increasing facilities for passengers, improving consumers’ protection and encouraging the aviation sector.
He said that privatization or public-private investment is the only option to improve the standard of the aviation sector in Pakistan as attracting international brands is not possible when the sector is working in limited resources. He said that capturing the business of international brands is the need of the hour to increase business activities at the country’s airports to increase revenue generation.
He said that the Islamabad Airport was being outsourced through international competitive bidding for 15 years but no employee would lose his job. He said that outsourcing does not mean that airports are being sold.
He said that the government had decided to outsource Islamabad, Lahore, and Karachi airports, adding that the Civil Aviation Authority (CAA) has issued a tender for outsourcing of Islamabad Airport while applications have been sought by November 8 and so far, 25 applications have been received.
He said that many countries have adopted the trend of outsourcing their airports for revenue generation including India that had planned to outsource its 25 airports.
The minister said that the PIA has inked an agreement with the New York City Government to lease out Roosevelt Hotel in the US state. The Roosevelt Hotel will be operated by the New York City Local Corporation for a period of three years, he added. He said that under the agreement, the US firm will provide residential facilities to housing migrants in the hotel.
He added the management had got an opportunity offered by the New York City government to utilise the hotel’s 1,025 rooms for migrant business. “It will generate $220 million of investment for Pakistan with $18 million as clear profit.”
He said that the Roosevelt Hotel was shut down during the coronavirus pandemic. He added that it was a temporary arrangement to save the property and the PIA has to make serious efforts within the next three years to build a 40-story commercial building with multiple purposes.
The minister further said that Pakistan and China are also all set to sign an agreement in October 2023 to start work on constructing ML-1 Railway line from Karachi to Peshawar which will cost $6.6 billion. He said ML-1 project has already been late as the past government did nothing in this regard.
The project would be signed in October, he added. He said that in the first phase, ML-1 project from Karachi to Multan will be completed. Moreover, the government will also connect Gwadar port with a railway link and this will also give substantial business to the rail network.
The minister said that the Pakistan Railways was annually spending Rs5billion on power purchase but now he has asked the authorities to link Railways colonies with respective power distribution companies by installing their own meters in 27,000 residential and official buildings, adding the step will reduce the financial burden from railways.
Moreover, from now onwards the secretary railways will not take all the decisions but the government has empowered Railways Board of Directors (BoD) to take all necessary decisions.
He also strongly refuted the news item that appeared in a section of the press and social media regarding the recent Hazara Express accident, saying two jammed wheels of the locomotive and a damaged piece of railway track were the main reasons for the railway tragic accident near Nawabshah.
The minister regretted that fake news was being circulated on both social media and some television networks. No wood was used in joints rather Parmelia fishplate was being used for railway signal system worldwide as the signal system did not work without it, he said and explained that it was a special type of fishplate which was imported from Germany or Holland. Besides, a piece of railway track near the accident site was also damaged, which led to the accident.
The minister said that PR has suspended six of its officials, including two 18-grade officers, in connection with the derailment of the Hazara Express near Nawabshah that left at least 30 people dead and scores injured last week.
He said 30 people lost their lives and dozens sustained injuries in the tragic accident. Maximum casualties were due to capsizing of the bogies rather than derailment, he added. The minister said six railway officials have been suspended and financial compensation worth Rs1.5 million each would be given to the families of deceased passengers as per railways standard operating procedures (SOPs).
Rafique also called for investment in railways as there was an acute shortage of funds and staff. The minister said that in 2022 devastating floods, Pakistan Railways suffered an estimated Rs500 billion financial losses, consequently, the PR requested the government for the provision of funds but owing to extreme financial constraints, it could not be provided to the railways. Despite financial constraints, PR restored all the destroyed railways networks and ensured connectivity.
The government initiated the Pakistan-Afghanistan-Uzbekistan railways network which will connect Pakistan to not only central Asia but also to Russia and Baltic states.
Copyright Business Recorder, 2023
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