ISLAMABAD: The government of Pakistan has committed to the International Monetary Fund (IMF) that it will privatise 26 percent of PIA’s shares to strategic investors by end of December 2014.
For this purpose, the government also decided to hire a financial adviser by end of March 2014 to prepare a comprehensive rstructuring plan and seek potential strategic private sector participant in the company. Finance Secretary Waqar Masood made these revelations to the Senate’s Standing Committee on Finance, Revenue, Economic Affairs, Statistics, Planning and Development and Privatisation.
Senator Nasreen Jalil presided over the meeting and members of the committee openly opposed the privatisation of PIA. They were of the view that the national flag carrier is a strategic asset of Pakistan and several defence-related issues were associated with it. During critical situation, like war, the government takes support of PIA and Pakistan Railways for a moment but in absence of these the country may confront severe challenges.
The committee also questioned that why was PIA’s privatisation on top of the government’s policy despite having 64 other public sector enterprises on the privatisation list. PIA is recognition of Pakistan in international community and its creditability will be greatly disturbed if it is going to be privatised. In the current situation of the privatisation process of PIA, the government will not be in a position to get higher sale proceeds and it will be better first to take appropriate steps to make it a profitable organisation.
PPP Senator Islamuddin Sheikh was of the view that his party is totally opposing the privatisation of PIA and claimed that privatisation process is a failed activity keeping in view the privatised departments. The government has to include more aircraft in the PIA fleet to make it profitable and then think over its privatisation. Senator Usman Saifullah Khan said when in Lahore the Punjab government is running Metro Bus then why can not PIA be run at federal level.
ANP Senator Haji Adeel said that the government should take all those measures which it plans before privatisation for the private sector, and then run it. He also suggested that workforce ration on per airplane should be rationalised. First improve the PIA’s situation and then offer for privatisation, he maintained. He also claimed that privatisation of PIA was carried out just to benefit a particular group.
PPP Senator Sughra Imam asked why were the profit making public sector entities put on the privatisation list, which are contributing billions of rupees to the national exchequer. She also said that PIA was going to privatise on the direction of IMF and it looked that the whole economy is run on dictations of the IMF.
Finance Secretary Waqar Masood told the committee that the government is not making any decision in haste to privatise PIA rather it is pre-planned and the main purpose is to avoid the expected more losses from it. Total accumulated loss of PIA is about Rs 180 billion. The per month loss of PIA was Rs 3.0 billion but with some prudent polices the losses came down to Rs 1.5 billion per month.
The government is in search of joint venture with private sector on the basis of public-private partnership mode. He also informed the committee that the government has just informed the IMF that Pakistan is going on to privatise 26 percent strategic asset to private sector by end of Dec 2014. There is no alternate to avoid expected loss of PIA but to privatise it. He also assured that rights of PIA employees will be fully protected in the privatisation process. There will be complete transparency in PIA privatisation.
The finance secretary also informed the committee that there is nothing new in PIA privatisation because the same process was being carried out in the country during the last 25 years.
Minister of State for Privatisation Zubair Umar also assured the committee that transparency will be kept on top while privatising PIA. He claimed that majority of employees in PIA are political appointees and they are unable to run the organisation on profitable basis.
Ms Jalil decided to hold another meeting over the business plan of PIA to make it a profitable organisation. She claimed that it could be made a profitable organisation but required dedicated staff and efficient management.
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