Follow Us on Google News
ISLAMABAD: The caretaker government has finalized the “binding plans” for the incoming government after the February 8 elections to privatize the loss-making Pakistan International Airlines (PIA), Privatization Minister Fawad Hasan Fawad said on Friday.
Historically, elected administrations have been reluctant to implement unpopular policies, such as selling the national flag carrier. But in June, as part of an agreement with the International Monetary Fund (IMF), the coalition government in place at the time decided to restructure state-owned businesses that were losing money.
Weeks after signing the IMF agreement, the government, then led by Shehbaz Sharif, chose to privatize PIA. The departing parliament gave the caretaker government, which assumed office in August, the authority to take whatever necessary action to accomplish the fiscal goals set forth in the agreement with the IMF.
“Our job is 98% done,” Fawad told Reuters when asked about the plan to sell the airline. “The remaining 2% is just to bring it on an excel sheet after the cabinet approves it,” he said, adding that the cabinet would also decide whether to sell the stake by tender or through a government-to-government deal.
Fawad said the plan, drawn up by transaction adviser Ernst & Young, would be presented to the cabinet for approval before the tenure of the administration ends following the election. “What we have done in just four months is what past governments have been trying to do for over a decade,” Fawad said.
PIA had liabilities of Rs785 billion and accumulated losses of Rs713 billion as of June last year. Its chief executive officer (CEO) had said that the losses in 2023 were likely to be Rs112 billion. Fawad confirmed the PIA privatisation plan involved its debts being spun off into a separate entity.
Progress on the privatization will be a key issue if the incoming government goes back to the IMF once the current bailout program expires in March. Caretaker Finance Minister Shamshad Akhtar told reporters last year that Pakistan would have to remain in IMF programs after its expiry.
Besides operational and technical measures for PIA’s divestment, the caretaker government has also amended a 2016 law that had blocked selling off its majority shares, according to a draft posted on the Pakistan parliament’s website.
