ISLAMABAD: Pakistan International Airlines (PIA), burdened by Rs200 billion in debts and owning Rs145 billion in assets, is up for privatisation - a net deficit of Rs55 billion, a parliament panel was apprised on Monday.
National Assembly’s Standing Committee on Privatisation meeting was held on Monday under the chair of Dr Muhammad Farooq Sattar. The chairman committee recommended the Privatisation Division to offer the same relief package to the affected employees of PIA as was given during the privatisation of PTCL to the UAE Company, Etisalat.
To further gear up the privatisation of PIA and other State-Owned Entities (SOEs), the parliamentary penal approved, “The Privatization Commission Amendment Bill 2023”. On December 14, 2023, President Dr Arif Alvi promulgated the Privatization Commission (Amendment) Ordinance 2023.
Aviation panel told: PIACL sell-off process almost over
The ordinance is promulgated to end unnecessary delays in privatisation, resolve issues and ensure the implementation of principles of law and justice. It will help establish Appellate Tribunal.
Privatization Commission Secretary Usman Akhtar Bajwa informed the committee that the federal government parked legacy liabilities of Rs600 billion to the holding company, whereas, PIA’s core business of 51 to 100 percent with Rs200 billion liabilities would be offered to six bidders, he added.
Member Committee Sehar Kamran, criticising the privatisation of PIA, said this showed the government was selling liability to small companies, which are participating in the bidding with little hope to inject any mega investment which enables it to compete the global operators.
Farooq Sattar said that the government must negotiate with the employees’ unions and at least a silver handshake should be offered to them and other benefits including raise in salaries in proportion to inflation.
Chief Executive Officer (CEO) PIA Muhammad Amir Hayat said the management of PIA recently took various steps to improve the financial health of the company including the per aircraft ratio of employees has drastically been cut down from 500 to 219. Secretary Privatization Commission said the bidders would make airline profitable by investing around half a billion US dollars in the next couple of years as per the government’s conditions. He expressed the hope that the airline needed investment and the government had not enough cash to inject in the airline business.
Responding to a question regarding the expansion of airlines’ routes and ban by the EU, the secretary said that the matter of aviation security and safety would be taken to the board of the European Union Aviation Safety Agency. Later, the case would be taken to the UK Aviation Authority and the USA.
The committee also expressed concern over the delay in the process of privatisation of Pakistan International Airline Company (PIAC) resulted in an increase in its losses/liabilities from Rs200 billion in 2015 to Rs800 billion in 2024 and recommended to expedite the process in a transparent manner.
Copyright Business Recorder, 2024