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Monday February 26, 2024

PM directs to speed up privatisation of crisis-hit PIA

"State-owned enterprises, which are facing financial loss, will be privatised to save national exchequer," says Premier Kakar

By APP
October 23, 2023
A Pakistan International Airlines (PIA) aircraft at an airport. — Radio Pakistan/File
A Pakistan International Airlines (PIA) aircraft at an airport. — Radio Pakistan/File 

In view of Pakistan International Airlines’ (PIA) deepening financial crisis, caretaker Prime Minister Anwaar-ul-Haq Kakar on Monday directed the authorities concerned to expedite the process of privatisation of the national flag career.

During the past few weeks, the flight operations of the PIA have been severely affected with multiple flights cancelled due to the unavailability of fuel amid the prevailing financial crunch faced by the national carrier.

As many as 26 flights were cancelled from Karachi, Lahore, Islamabad, Quetta, Bahawalpur, Multan, Gwadar, and other cities after the Pakistan State Oil (PSO) slashed its fuel supply to the PIA on Sunday (yesterday), sources said.

Chairing a review meeting on the financial crisis of PIA, the prime minister stressed the finalisation of the privatisation process within the stipulated time.

PM Kakar sought regular compliance reports to be submitted to him in this regard.

He said the government would continue extending support to PIA till the completion of its privatisation. He said the state-owned enterprises (SOEs), which were facing financial loss, would be privatised to save the national exchequer.

The premier was given a briefing on the financial situation of PIA.

In August 2023, the Cabinet Committee on Privatisation (CCoP) approved to place PIA on an active list of privatisations following an amendment approved by parliament and also granted its assent to hire a financial adviser for the transaction of PIA’s Roosevelt Hotel, New York.

According to top official sources, the PIA was converted from a corporation into a public limited company registered under the Companies Ordinance, 1984.

So the legislative process was undertaken in 2016 through the joint session of parliament passed PIAC (Conversion) Act, 2016, whereby, PIAC was converted into a public limited company, namely Pakistan International Airlines Corporation Limited (PIACL).

However, one major amendment i.e. ‘Explanation’ in Sub-section 4 of Section 4 was incorporated in the said Act by parliament restricting the federal government from transferring management control in the airline business of PIACL while retaining at least 51% percent shares in such entity.