ISLAMABAD: The federal government will try to privatise the PakistanInternational Airlines (PIA) before general elections due this year,privatisation minister Daniyal Aziz said, as the ruling Pakistan MulsimLeague-Nawaz (PML-N) seeks to restart sales of state-run businesses.
Haemorrhaging money and losing market share to Gulf-based rivals such asEtihad and Emirates, PIA has been hit by management turmoil in recent yearsand a 2016 plane crash that led to 47 deaths.
The privatisation of loss-making entities that were draining the exchequerwas a key priority for the PML-N when it swept to power in 2013.
PIA was among 68 state-owned companies earmaked for privatisation in returnfor a $6.7 billion International Monetary Fund package that helped thegovernment stave off a default in 2013. Despite some initial success, theprocess stalled in 2016 after staff protests caused havoc with PIAoperations and the government passed a law that effectively made itimpossible to privatise the airline.
But Daniyal Aziz, chairman of the Privatisation Commission, told new agencyReuters that new plans have been drawn up to sell off PIA and he would takethe proposals to the cabinet committee on privatisation, chaired by PrimeMinister Shahid Khaqan Abbasi.
“Next step would be going to the cabinet committee…and that’s imminent,maybe even next week,” Aziz said in his Islamabad office this week.
The new plans focus on splitting up the carrier, with the core airlinebusiness being separated from vast peripheral operations such as catering,hotels and maintenance, Aziz said.
The core airline would then be sold.
But to complete the transaction, Aziz said, the government would have topass laws in parliament to reverse the 2016 legislation that converted PIAinto a limited company and effectively barred the government from giving upmanagement control.
The impetus to sell PIA has grown as the airline has piled up huge lossesestimated by its former CEO in March at about $30 million a month. Totaldebt stood at 186 billion rupees ($1.8 billion) at the end of 2016.
When asked how soon a buyer could acquire PIA, Aziz said: “Tomorrowmorning. If you have the money, come and buy it.”
Aziz gave no indication of an expected valuation.
Both Emirates and Etihad had shown interest in buying PIA before thegovernment backed down from privatisation in 2016, an English-languagenewspaper reported citing an unnamed official.
Analysts have been sceptical about the government’s ability, orwillingness, to take on powerful unions and embark on a privatisationprocess so close to general elections likely in July or August.
Aziz said that, owing to time restraints ahead of the elections, theprivatisation commission will focus on one state company per sector,including a bank and an energy company.
He added that there has been “huge interest” in buying Pakistan SteelMills, once the pride of Pakistan’s industrial output but now shut andbleeding cash.
“We will get runs on the board, but the real challenge is to bring tofruition the two big animals: one is PIA and the other one is Steel Mills,”Aziz said. – Agencies