Finance Minister Ishaq Dar has reportedly assured parliamentary committee of joint sitting that the government does not want to privatise Pakistan International Airlines (PIA) but wants divestment of its share. Sources in the Finance Ministry told Business Recorder that the committee was informed on Wednesday that the government plans to divest its residual shareholding in the corporation.
They further stated the government also clarified that PIA Investment Ltd and its assets, namely Roosevelt Hotel (New York) and Hotel Scribe (Paris) are not part of the ongoing PIAC. The meeting was also informed that no formal Transaction Structure was so far presented to the Privatisation Commission Board and Cabinet Committee for consideration and approval
The government also maintained that Privatisation Commission has not yet conducted valuation of PIAC, its real estate properties and/or business segments. As and when valuations are conducted, Privatisation Commission will ensure adherence to the best international practices. While giving background, the officials of Privatisation Commission reportedly stated that Cabinet Committee on Privatisation (CCOP) had approved restructuring of PIAC, leading to Strategic Private Sector Partnership in core operations.
The objective of strategic partnership was to promote rapid development and modernise the PIAC through an injection of private sector capital, skills and technology to upgrade its operational and financial performance as well as to achieve improvement in performance and operational efficiency of various business segments/ units of PIAC. Additionally, the objective was to enhance the value of government residual shareholding through much needed investments and up-gradation of PIAC by the strategic partner as well as to redefine the role of government from an owner-operator to that of a regulator whilst widening the ownership base of PIAC.
The Privatisation Commission stated that in Jan- Mar 2014, the process for hiring of financial advisor was approved by the PC Board for the restructuring and leading to strategic private sector partnership in PIA core airline operations and an Expression of Interest (EOI) was invited. A financial advisor consortium of M/s Dubai Islamic Bank, IATA Consulting, Deloitte, Haidermota BNR, Freshfields Bruckhaus Deringer, Abacus Consulting, APCO, and Prestige was appointed with the approval of PVC Board in July - October 2014 which recommended the conversion of PIAC, a statutory corporation functioning under the PIAC Act 1956, into a public limited company.
Financial advisors'' consortium conducted the due diligence, covering various aspects of PIAC including commercial, legal, financial&taxation, human resource, operational & technical etc and accordingly to facilitate the conversion of PIAC, a draft bill was prepared by the government. The matter is pending with Parliamentary Committee of the joint sitting for taking the opposition into confidence and Finance Minister gave a briefing to the committee on Wednesday. The Privatisation Commission reportedly stated that the process of PIA privatisation is at a standstill.