Govt ought to privatise PIA by April 15 under a law: privatisation minister

ISLAMABAD: Government will privatise the state-owned Pakistan International Airlines (PIA) by April 15, but it will continue to hold the airline’s management control, a privatisation minister said on Monday.

“The government will have to privatise the PIA by 15 April this year under a law,” Minister for Privatisation Daniyal Aziz told a press conference. In 2016, an amendment was unanimously made into the Pakistan International Airlines Corporation Act 1956 and according to which the airline has to be privatised by April 15, 2018.

“We have to implement it (PIA Act) by privatising the national flag carrier by April 2018,” Aziz said. Under the law, the management control of the PIA would, however, continue to remain in the hands of the federal government and that it would not be able to divest more than 49 percent shares to a third party.

The privatisation minister said the government would only privatise air transport business of the PIA “and rest of the business of the airline would be given to another company (on contract basis)”.

The minister didn’t give further details on the privatisation structure, but it may be a combination of sale and contracts. Aziz stressed that the rights of all the employees of PIA would be safeguarded.

The PIA’s privatisation was included in the early-year agenda of the ruling government, but the issue has turned so controversial that the government had to halt the process last year. The privatisation minister said PIA’s losses had reached to Rs325 billion by March last year.

“The privatisation of PIA has nothing to do with general elections as reported by a foreign news agency,” he said. “Professionalism and transparency will be ensured in the (privatisation) process and the government would follow the process as per Pakistan International Airlines Corporation Act, 1956.”

Aziz said private sector’s airlines are profitable throughout the world, while airlines, which are controlled by the government, are facing losses. “The government will ask the financial advisors of the PIA for the evaluation of the airline.”

The minister further said government and UAE-based telecom company Etisalat management are about to resolve the issue of $800 million outstanding dues on account of privatisation of Pakistan Telecommunication Company Limited (PTCL).

Etisalat had agreed for the valuation of 8 to 10 PIA’s properties, which are non-transferable, he added. The privatisation minister said annual losses of state-run entities are around Rs600 billion.

The government has reinitiated the process of privatising loss-making state-run entities, which were stopped a couple of years ago, he added. The minister said the government is also reinitiating the privatisation of Pakistan Steel Mills, whose losses are around Rs200 billion. “The government is paying millions of rupees to Pakistan Steel Mills as employees’ salaries.”