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                        <title>The Express Tribune</title>
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			<title>The true cost of PIA privitisation</title>
			<link>https://tribune.com.pk/story/2587758/the-true-cost-of-pia-privatisation</link>
			<comments>https://tribune.com.pk/story/2587758/the-true-cost-of-pia-privatisation#comments</comments>
			<pubDate>Sun, 18 Jan 26 07:13:44 +0500</pubDate>
			<dc:creator>
				<![CDATA[Dr Mohammad Zubair Khan]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category><category><![CDATA[T-Magazine]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2587758</guid>
			<description>
				<![CDATA[PIA’s privatisation was less a sale than a financial re-engineering exercise.]]>
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				<![CDATA[In the five years before privatisation, Pakistan International Airlines (PIA) experienced its most volatile financial period, with massive operational losses. The financial decline was rooted in years of overstaffing and inefficiency due to political interference and labour union pressure, Covid-19 related travel restrictions, and EASA flight ban following the failure of CAA resulting in revelations of fake pilot licenses, rising global fuel prices and the large rupee devaluation. But the financial collapse in 2023 was precipitated by the interest rate policy of the SBP raising rates to over 22 percent ostensibly to curb inflation but which crippled not only PIA but many corporations in Pakistan. While PIA and other corporations fell into crippling debt traps due to the SBP policy, commercial banks NBP, HBL, and BoP among others became the primary beneficiaries of PIA&rsquo;s decline. By 2024, banks earned about Rs424bn over the previous 15 years far exceeding the original &lsquo;principal amount&rsquo; of loans (Rs268bn). The airline was essentially a &quot;money printing machine&quot; for the banking sector.

Before the final &quot;clean-up&quot; for privatisation in 2025, PIA was kept alive through a complex and expensive survival strategy funded almost entirely by the Pakistani taxpayers. Even in privatisation the taxpayer has received no relief. In order to sell the airline, the government moved the bulk of the legacy debt to a &quot;Holding Co&quot; so the taxpayer is now officially the borrower, with servicing charges of Rs 32bn/year for the next decade to be paid in more taxes or charges.

While the privatisation was hailed as a success because the government &quot;saved&quot; the airline, it was at the expense of the taxpayer. 

While separating the liabilities from an insolvent public corporation is the norm in privatisation globally, the terms given to creditors despite their role in the financial collapse of PIA is scandalous. The cleanup deal for PIA&#39;s privatisation is a classic example of &lsquo;Socialising the Losses and Privatising the Gains.&rsquo; To make the airline attractive to the private sector, the government performed a financial &quot;magic trick&quot;: it removed the wreckage of the past and handed it to the taxpayer, while giving the banks a risk-free, high-yield exit. The Bifurcation created a &quot;Clean&quot; Airline and a &quot;Dirty&quot; HoldCo. The 10-year debt restructuring agreement reached with a consortium of nine local banks is widely viewed as a massive victory for the banking sector but at the public&#39;s expense. There was no principal haircut. Banks received 100 percent of their principal (PKR268bn). Highly unusual for a &quot;bankrupt&quot; entity; usually, creditors take a 20&ndash;40 percent haircut in such turnarounds. The banks were also given a generous deal on interest rate. A fixed 12 percent per annum for 10 years, while lower than the 22 percent peak in 2024, it &quot;locked-in&quot; profit even as market rates started to drop in 2026. With long-term inflation projected at 5-7 percent over the next 10 years, it implies the commercial banks extracted a &lsquo;real interest rate&rsquo; of 7-5 percent which is exorbitant for a sovereign-backed debt. Banks will collect PKR322bn in interest alone over the next ten years, which is more than the original loan amount they provided.

The &quot;Revolving Door&quot; Roles of Officials has raised concern in this lopsided arrangement. Officials who previously regulated the creditor banks and the capital markets negotiated a deal that disproportionately favoured the banks (via the 12 percent no-haircut deal) and the buyers (via the asset-heavy, debt-lite split). By converting commercial debt into a sovereign-backed bond at 12 percent fixed interest, the government has guaranteed bank profits regardless of PIA&rsquo;s future performance. Even if the Roosevelt Hotel (held in the HoldCo) is sold for its $1 billion valuation, it will barely cover the interest burden leaving the burden of principal solely on the taxpayer.

The official announcement that the Arif Habib-led consortium won a 75 percent stake in PIA with a bid of PKR 135 billion, is misleading, and deceptive. The transaction is structured such that most of the total bid of Rs135bn never reaches the seller&rsquo;s (government) pockets. The Government of Pakistan GOP will receive only Rs10.125 bn (which is the actual sale price) paid to the seller for ownership. The remaining Rs124.875 bn will be injected into the airline after the sale. Additionally, the buyer has committed to inject another Rs80bn into the value of their own asset and not to the seller. When Rs654bn in liabilities that the government took over to make the airline &quot;sellable&quot; is factored in, the state has effectively paid roughly Rs 644 billion to get rid of the airline; this is &quot;divestment at a loss&quot; designed to stop the &quot;bleeding&quot; of future subsidies.

To ensure compliance with the investment commitment by the buyer, the PIA privatisation deal includes certain enforcement mechanisms and an &lsquo;employee protection&rsquo; mandate for 12 months. The buyer&rsquo;s primary obligation is to transform PIA from its current &quot;skeleton&quot; state into a competitive regional player. The deal includes specific &lsquo;Fleet Expansion Milestones&rsquo; that the Arif Habib-led consortium is legally bound to meet. The &quot;teeth&quot; in the deal are not about the price, but about the &lsquo;Business Plan&rsquo; says the government. In exchange for the investment commitments, the Buyer has received a business with a potential that is scandalous, the reason why the &quot;Fraudulent&quot; Headline Persists. The Arif Habib conglomerate pays the government a measely Rs10.1bn (7.5 percent of the commitment) in actual cash. They spend the rest of the &quot;bid money&quot; (PKR-125bn) on themselves. With new planes, they capture the London slots profit. When LHR generates the estimated PKR 40&ndash;50 billion in annual revenue (which is the amount lost during the ban), the buyer will recoup their entire &quot;Investment Commitment&quot; Rs125bn in less than 3 years!

The biggest risk for the Arif Habib consortium are the EASA and UK DfT Safety Audits. While the bans were lifted in late 2024, they are &quot;conditional.&quot; If the new private management fails a safety inspection in 2026, the routes could be shut down again. And EASA and DfT&rsquo;s primary concern aren&rsquo;t just PIA, but the Pakistan Civil Aviation Authority (PCAA). If the PCAA fails its ICAO USOAP audit in 2026, PIA could be grounded again regardless of its own performance.

The &quot;Non-Core Assets&quot;of PIA, now allocated to HoldCo&mdash;specifically the Roosevelt Hotel (New York) and Hotel Scribe (Paris)&mdash;are the government&#39;s (taxpayers&rsquo;) only asset against the PKR 654 billion legacy debt. But even the sale or redevelopment of these hotels cannot fully offset the debt. In a &quot;best-case&quot; scenario, if the Roosevelt fetches $1 billion target after redevelopment, there will still be a shortfall of PKR250bn to clear the debt. And if the Roosevelt redevelopment takes the usual 8 years, the government will have added PKR 256bn in new interest costs at the exorbitant 12 percent agreed, before the &quot;wealth&quot; is even created thus burning out the asset completely in the interim. The two hotels working at full capacity cannot cover the cost of interest payments generated by the generous restructuring deal.

To eliminate the unjustified debt burden on taxpayers the government must return to Sovereign Debt Restructuring. One option is that instead of repaying the debt in cash, the government gives the banks equity stakes in the Roosevelt Hotel and Scribe Hotel JVs in exchange for cancelling the principal debt (Rs268bn). Another option would be that the current 12 percent interest rate is further cut to 7 percent otherwise, at 12 percent the debt will grow faster than the hotel&#39;s value. Essentially, with a 5 percent interest cut, the taxpayer would &quot;earn&quot; back the value of the airline every year.

The 2025 PIA privatisation successfully halted the airline&#39;s daily operational haemorrhaging but at a high moral and fiscal cost. The deal effectively socialised two decades of mismanagement, ensuring that while the private sector inherits a &quot;clean&quot; airline, the Pakistani taxpayer remains the primary financier of the legacy debt, paying a &quot;premium&quot; interest rate to a banking sector that has already seen historic profit growth from the decline of PIA.

The writer is a PhD Johns Hopkins, former IMF staff, Federal Minister of Commerce.

All facts and information are the sole responsibility of the writer]]>
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			<title>Another PIA crew member goes missing in Toronto</title>
			<link>https://tribune.com.pk/story/2502712/another-pia-crew-member-goes-missing-in-toronto-1</link>
			<comments>https://tribune.com.pk/story/2502712/another-pia-crew-member-goes-missing-in-toronto-1#comments</comments>
			<pubDate>Mon, 14 Oct 24 07:25:42 +0500</pubDate>
			<dc:creator>
				<![CDATA[News Desk]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2502712</guid>
			<description>
				<![CDATA[This incident adds another case to over 12 PIA attendants reportedly missing in Toronto in the last year]]>
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				<![CDATA[Another flight attendant of Pakistan International Airlines (PIA) has gone missing in Canada. The crew member, identified as Mohsin Raza, was last reported in Toronto and was due to report for a flight from Karachi on October 13.

Mohsin Raza, who is from Islamabad, failed to be present at the hotel before the scheduled flight PK 784. His disappearance was discovered when he did not report for duty.

In the past year, the number of PIA attendants who have reportedly gone missing in Toronto has exceeded twelve. Sources indicate that the airline&#39;s policy requiring crew members to submit their passports to airline authorities in Toronto has not been effective.

A spokesperson for PIA confirmed that the airline&#39;s management has begun an investigation into the circumstances surrounding the missing crew member. If found guilty, the airline stated that strict disciplinary action would be taken, which could include termination of employment.

Previously in June, a flight attendant Noor Sher, a member of the 16-member flight attendant team assigned to flight PK 781 from Pakistan to Toronto, Canada also disappeared.

It had been reported that the missing air attendants have applied for asylum in Canada.

&nbsp;]]>
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			<title>PIA's deputy station manager Javed Iqbal Bajwa resigns over fake degree scandal</title>
			<link>https://tribune.com.pk/story/2493794/pia-deputy-station-manager-in-birmingham-resigns-over-fake-degree-scandal</link>
			<comments>https://tribune.com.pk/story/2493794/pia-deputy-station-manager-in-birmingham-resigns-over-fake-degree-scandal#comments</comments>
			<pubDate>Thu, 05 Sep 24 11:29:26 +0500</pubDate>
			<dc:creator>
				<![CDATA[News Desk]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2493794</guid>
			<description>
				<![CDATA[PIA manager quits after a probe confirmed his degree was fake, raising questions about his appointment.]]>
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				<![CDATA[Pakistan International Airlines (PIA) Deputy Station Manager Javed Iqbal Bajwa, stationed in Birmingham, resigned from his position after an inquiry revealed that his educational credentials were fake, according to sources.

PIA initiated an investigation into Bajwa&rsquo;s intermediate certificate, which had been submitted as part of his employment records.

Upon verification from the Lahore Board, the certificate was found to be fraudulent, leading to the airline&rsquo;s request for his resignation.



The 73-year-old initially resisted stepping down from his position, despite the revelation.

However, under pressure from his family, Bajwa submitted his resignation in early August.

Bajwa, who joined PIA in 1977, changed his employment status to British citizenship in the late 1980s.&nbsp;

Despite his fake degree, he received favourable treatment from the airline, including financial benefits upon his resignation, sources revealed.

This stands in contrast to other PIA employees with fake credentials, who were terminated without any compensation or benefits.

The scandal has raised questions over the standards of PIA&#39;s employment practices, particularly in comparison to others who were dismissed under similar circumstances.

A spokesperson for PIA confirmed the findings and said that the airline had issued a show-cause notice to Bajwa, giving him seven days to prove the authenticity of his educational documents.

However, after failing to provide any legitimate evidence, Bajwa resigned.

In the past, PIA has been strict in its actions against employees with fake degrees, typically leading to termination and legal action.

Bajwa&rsquo;s case has prompted criticism due to the leniency extended to him in the form of financial benefits.]]>
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			<title>PIA cuts fares for Umrah pilgrims</title>
			<link>https://tribune.com.pk/story/2475512/pia-cuts-fares-for-umrah-pilgrims</link>
			<comments>https://tribune.com.pk/story/2475512/pia-cuts-fares-for-umrah-pilgrims#comments</comments>
			<pubDate>Mon, 01 Jul 24 00:33:28 +0500</pubDate>
			<dc:creator>
				<![CDATA[Our Correspondent]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2475512</guid>
			<description>
				<![CDATA[Umrah round-trip fare from Karachi to Madina will be Rs76,000, other major cities for Rs86,000]]>
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				<![CDATA[Pakistan International Airlines (PIA) has announced a substantial reduction in airfares for travel to Saudi Arabia for Umrah pilgrims.

According to a PIA spokesperson, pilgrims travelling from Pakistan to Madina will benefit from discounted fares.

The round-trip fare for Umrah from Karachi to Madina will be Rs76,000, excluding taxes. For travellers from Islamabad, Lahore, Peshawar, Multan, and Sialkot to Madina, the round-trip fare will be Rs86,000.

The national flag carrier has reduced the fare for Umrah pilgrims by Rs34,000. Previously, the fare was Rs120,000, which has now been reduced to Rs86,000.

The PIA spokesperson stated that this discount is effective immediately and will remain in effect until July 15.

Earlier this year on April 4, the national carrier reduced the one-way fare for Saudi residents and work visa holders by 30% as well as 20% for Umrah pilgrims.

The discount applied from April 7 to 11 allowing passengers to travel to Jeddah and Madina to benefit from it.

Official sources at the Pakistan Hajj Mission told APP that the month-long pre-Hajj flight operation, which began on May 9 to transport approximately 70,105 intending Pakistani pilgrims to the holy cities of Saudi Arabia under the government scheme, continued smoothly and according to schedule.

The sources noted that a total of 38,150 Pakistani pilgrims, constituting almost 54.35% of the total, had reached Madinah and Makkah.

As of April 8, PIA achieved a significant milestone in its financial performance for the nine months ending January to September 2023, according to an audited report.

During this period, the national flag carrier reported a remarkable increase in revenue, soaring to Rs186 billion. This marked a substantial rise of Rs14 billion compared to the corresponding period in 2022, demonstrating growth despite challenges.

Despite the surge in revenue, PIA faced a loss of Rs75 billion throughout the nine months of 2023. However, this figure reflects a notable improvement from the previous year, with a decrease of Rs12 billion in losses compared to 2022.

&nbsp;]]>
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			<title>PIA sell-off likely in August</title>
			<link>https://tribune.com.pk/story/2474396/pia-sell-off-likely-in-august</link>
			<comments>https://tribune.com.pk/story/2474396/pia-sell-off-likely-in-august#comments</comments>
			<pubDate>Wed, 26 Jun 24 23:10:44 +0500</pubDate>
			<dc:creator>
				<![CDATA[Our Correspondent]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2474396</guid>
			<description>
				<![CDATA[Six companies have been shortlisted for the privatisation process of the national carrier]]>
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				<![CDATA[The privatisation of PIA is likely to take place in the first week of August.

According to sources, six companies have been shortlisted for the privatisation process of the national carrier.

The shortlisted companies have asked for the provision of details about the PIA and sought time till July to review its financial issues.

The consortium of shortlisted companies is being provided with details about the PIA.

The announcement that the government had chosen six companies qualified to bid to buy the PIA came earlier this month a couple of weeks after it had extended the date for submitting expressions of interest.]]>
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			<title>PIA crew’s frequent disappearances overseas raise alarm, airline under scrutiny</title>
			<link>https://tribune.com.pk/story/2474180/pia-crews-frequent-disappearances-overseas-raise-alarm-airline-under-scrutiny</link>
			<comments>https://tribune.com.pk/story/2474180/pia-crews-frequent-disappearances-overseas-raise-alarm-airline-under-scrutiny#comments</comments>
			<pubDate>Wed, 26 Jun 24 08:27:39 +0500</pubDate>
			<dc:creator>
				<![CDATA[News Desk]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category><category><![CDATA[World]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2474180</guid>
			<description>
				<![CDATA[Crew member Noor Sher is the latest to vanish during an overseas assignment, sparking concern]]>
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				<![CDATA[Pakistan International Airlines (PIA), the national airline of Pakistan, is grappling with the issue of staff disappearances during overseas assignments.

The latest case involves Noor Sher, a member of the 16-member flight attendant team, assigned to flight PK 781 from Pakistan to Toronto, Canada.

Sher&#39;s disappearance was noticed this week when he failed to report for his scheduled return flight.

These repeated incidents have raised serious concerns about the airline&#39;s ability to retain its staff on international assignments with at least 14 crew members, both male and female, reported to have deserted since January 2023.

Previously, in 2022, five crew members had disappeared without a trace. In the first incident of this year, air hostess Faiza Mukhtar allegedly slipped away in Canada during a layover in January.

Mukhtar, posted on flight PK 781 from Islamabad to Toronto, did not report for the return flight, leaving behind a four-year-old son.

Another recent case involved flight steward Jibran Baloch, who disappeared from his hotel room in Toronto.

Baloch was scheduled to return to Karachi on PIA flight PK 782 but failed to report for duty during the last week of February.

PIA staff discovered that he had vanished during a routine check of his room.

Earlier the same week, air hostess Maryam Raza, known as the &quot;Thank You PIA&quot; girl, left a note and her uniform in her hotel room before disappearing in Toronto.

Raza&#39;s disappearance followed a similar pattern, as she did not report for her return flight to Karachi. Despite measures such as collecting passports and obtaining affidavits, the airline has been unable to prevent these incidents.]]>
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			<title>Govt focused on lowering inflation and supporting industries: FM Aurangzeb</title>
			<link>https://tribune.com.pk/story/2473882/govt-focused-on-lowering-inflation-and-supporting-industries-fm-aurangzeb</link>
			<comments>https://tribune.com.pk/story/2473882/govt-focused-on-lowering-inflation-and-supporting-industries-fm-aurangzeb#comments</comments>
			<pubDate>Tue, 25 Jun 24 10:45:40 +0500</pubDate>
			<dc:creator>
				<![CDATA[News Desk]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2473882</guid>
			<description>
				<![CDATA[Highlighted efforts are underway to accelerate the digitization of FBR and privatization of PIA]]>
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				<![CDATA[Finance Minister Muhammad Aurangzeb emphasized on Tuesday that the government&#39;s top priorities include further reducing inflation and facilitating industries.

Concluding the debate on the federal budget in the National Assembly, Aurangzeb acknowledged positive suggestions from parliament members during the discussions.

He highlighted that efforts are underway to accelerate the digitization of the Federal Board of Revenue (FBR) and the privatization of Pakistan International Airlines (PIA).

The government has already begun implementing budgetary measures, with a focus on sectors like agriculture, education, and health, said Aurangzeb.

The finance minister underscored the significance of agriculture, education, and health sectors in the government&#39;s agenda.

He mentioned considerations for exempting charitable hospitals from sales tax and emphasized stringent actions against retailers not partaking in the FBR&#39;s merchant-friendly scheme. Additionally, pension reforms aim to generate savings.

Aurangzeb expressed pride in the armed forces&#39; performance, affirming the government&#39;s commitment to providing necessary resources. He added steps are being taken to ensure security for Chinese experts in the second phase of the China-Pakistan Economic Corridor (CPEC).

The finance czar informed about progress towards the next International Monetary Fund (IMF) program, aiming for it to be Pakistan&#39;s final such program. The upcoming fiscal year&#39;s budget prioritizes completing ongoing projects and promoting public-private partnerships, said Aurangzeb.

He further stated that the federal budget aims to reduce the fiscal deficit by focusing on increasing resources and cutting unnecessary expenses, adding immediate measures will target downsizing the federal government and curbing resource wastage, continuing the Prime Minister&#39;s directive for simplicity and austerity.

He affirmed the federal government&#39;s commitment to achieving financial stability in collaboration with provincial governments and enhancing the country&#39;s overall financial resources.

Discussions are ongoing regarding the distribution of federal expenses, with efforts to ensure provincial contributions align with national expenditures, said Aurangzeb, extending gratitude to chief ministers of all provinces for their contributions to this dialogue.

Aurangzeb earlier underscored the country&#39;s need to &#39;privatise&#39; critical sectors of the country. Highlighting a staggering example, the minister revealed that Pakistan International Airlines (PIA) alone has accrued losses amounting to Rs. 622 billion, recently shouldered by the government.

He added that looking ahead, the administration plans to initiate the outsourcing of airports, a strategic move intended to stimulate economic growth by leveraging private sector efficiency.

Acknowledging the necessity of immediate relief measures, he reiterated the government&#39;s commitment to assuming full responsibility for mitigating losses and fostering a conducive environment for sustainable economic progress.

Saying that &#39;countries run on taxes, not charity&#39; he also highlighted ongoing issue of tax evasion, noting that many individuals and businesses are avoiding FBR scrutiny due to concerns over harassment.



https://www.facebook.com/NationalAssemblyOfPakistan/videos/1463761697621830/




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			<title>Another PIA flight attendant goes missing in Canada</title>
			<link>https://tribune.com.pk/story/2473768/another-pia-flight-attendant-goes-missing-in-canada</link>
			<comments>https://tribune.com.pk/story/2473768/another-pia-flight-attendant-goes-missing-in-canada#comments</comments>
			<pubDate>Tue, 25 Jun 24 05:51:14 +0500</pubDate>
			<dc:creator>
				<![CDATA[News Desk]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
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				<![CDATA[It has been reported that the missing air attendants have applied for asylum in Canada]]>
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				<![CDATA[Another Pakistan International Airlines (PIA) flight attendant has reportedly disappeared in Canada, bringing the total count of missing staff from the national carrier in Canada to 14.

According to sources, the string of alleged disappearances of flight attendants on PIA&rsquo;s Toronto route continues unabated.

The latest case involves Noor Sher, a member of the 16-member flight attendant team assigned to flight PK 781 from Pakistan to Toronto, Canada.

Noor Sher&#39;s disappearance was noticed when he failed to report for his scheduled return flight, adding to the tally of 14 male and female PIA staff who have gone missing in Toronto.

It has been reported that the missing air attendants have applied for asylum in Canada.

It&#39;s noteworthy that a female flight attendant, currently in detention in Toronto, had been posted on the Toronto flight more than ten times.

Despite specific instructions against her assignment on the Toronto flight, she was repeatedly rostered for duty.

There has been no significant progress in the ongoing investigation into the responsible parties involved in the appointment of Hina Sani, who remains in Toronto.

Sources indicate that both the aviation ministry and the national airline have established separate committees to conduct investigations.

Meanwhile, according to a PIA spokesperson, all previously missing flight attendants have been terminated from their positions.

Departmental action has also been initiated concerning Noor Sher&#39;s case.

The reports from the Ministry and Airline Inquiry Committees regarding the appointment of air hostess Hina Sani are still awaited.

&nbsp;]]>
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			<title>PIA flight disruptions jeopardise Gilgit-Baltistan’s tourism boom</title>
			<link>https://tribune.com.pk/story/2473108/pia-flight-disruptions-jeopardise-gilgit-baltistans-tourism-boom</link>
			<comments>https://tribune.com.pk/story/2473108/pia-flight-disruptions-jeopardise-gilgit-baltistans-tourism-boom#comments</comments>
			<pubDate>Sat, 22 Jun 24 16:13:30 +0500</pubDate>
			<dc:creator>
				<![CDATA[shabbir.mir]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2473108</guid>
			<description>
				<![CDATA[G-B CM Haji Gulbar Khan urges action on PIA flight disruptions, highlighting economic strain and travel inconveniences]]>
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				<![CDATA[As the peak tourism season hits its stride, Gilgit-Baltistan (GB) is grappling with significant disruptions caused by erratic schedules, excessive delays, and frequent cancellations of PIA flights.

These disruptions are threatening the region&rsquo;s thriving tourism sector and causing widespread frustration among travellers. In response, Chief Minister Haji Gulbar Khan has urgently appealed to Federal Minister for Aviation, Khawaja Asif, for immediate intervention.

The plea, articulated by Secretary to the Chief Minister Usman Ahmed, underscores the adverse effects on the region&#39;s economy and its residents, highlighting that even government officials are struggling to attend crucial meetings in Islamabad.

Gilgit-Baltistan, renowned for its breathtaking mountainous landscapes and serene valleys, is a prime tourist destination.

Home to some of the world&#39;s highest peaks, including K2, and stunning sites like Fairy Meadows and Hunza Valley, the region attracts thousands of tourists annually. However, the current state of unreliable air travel is causing significant challenges for both tourists and locals.

Read also: G-B power crisis deepened by mountain tourism

Local passengers have voiced their frustration. Sara, a frequent traveller, stated, &quot;We plan our trips weeks in advance, only to face last-minute cancellations. It&rsquo;s extremely inconvenient.&quot;

Similarly, Ahmed, a tour operator, remarked, &quot;These delays are hurting our business. Tourists are reconsidering their plans due to the uncertainty.&quot;

Additionally, road travel remains cumbersome due to frequent traffic blocks at Naran Kaghan.

CM Khan emphasised the critical role of reliable air travel in boosting tourism and supporting local livelihoods.

He urged the federal government to prioritise resolving these issues to restore the credibility of the national airline and facilitate smoother travel for all.]]>
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			<title>Post-Hajj operation begins</title>
			<link>https://tribune.com.pk/story/2472701/post-hajj-operation-begins</link>
			<comments>https://tribune.com.pk/story/2472701/post-hajj-operation-begins#comments</comments>
			<pubDate>Fri, 21 Jun 24 04:50:51 +0500</pubDate>
			<dc:creator>
				<![CDATA[Our Correspondent]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2472701</guid>
			<description>
				<![CDATA[First batch landed in Multan carrying 150 passengers, second reached Lahore with 190 pilgrims]]>
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				<![CDATA[The Pakistani Hajj pilgrims on Thursday started returning to the country after completing their religious obligations with various flights bringing them back.

On the first day of the month-long post-Hajj flight operation, the first batch of 1,723 Hajj pilgrims were expected to return through different flights to four cities.

The pilgrims were scheduled to fly from Saudi Arabia to Multan, Lahore, Karachi, and Islamabad.

The first post-Hajj flight PF-723 landed in Multan from Jeddah airport carrying 150 passengers.

Similarly, the second flight PA-471 reached Lahore with 190 pilgrims on board.

Punjab Hajj Director Muhammad Rizwan Sharif and Lahore Deputy Director Mujeeb Shah accompanied by Civil Aviation officials greeted the returning pilgrims, presenting them with bouquets in a warm reception.

The second flight, carrying 150 pilgrims, landed in Lahore at 7 pm.

The first post-Hajj Pakistan International Airlines (PIA) flight PK-860 arrived at the Jinnah International Airport in Karachi from Jeddah, carrying 160 pilgrims.

PIA District Manager Umar Khan, Airport Manager Javed Pichoho, and other officials warmly welcomed the pilgrims.

Another PIA flight, PK-740, from Jeddah landed at the Islamabad International Airport in the federal capital, returning 443 pilgrims.

They were received by their relatives and friends, who adorned them with flower garlands.

Airport Manager Aftab Gilani, the Hajj deputy director, the chief security officer, and PIA officials were present there to welcome the pilgrims.

Moreover, 200 and 150 pilgrims arrived in Islamabad earlier through private flights.

Thr PIA will bring back over 35,000 pilgrims from Saudi Arabia through 171 flights in the following weeks till July 21. The flights are operational for Karachi, Islamabad, Lahore, Multan, Sialkot, and Peshawar.]]>
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			<title>PIA blamed for violation of loan conditions</title>
			<link>https://tribune.com.pk/story/2470379/pia-blamed-for-violation-of-loan-conditions</link>
			<comments>https://tribune.com.pk/story/2470379/pia-blamed-for-violation-of-loan-conditions#comments</comments>
			<pubDate>Fri, 07 Jun 24 20:19:16 +0500</pubDate>
			<dc:creator>
				<![CDATA[Our Correspondent]]>
			</dc:creator>
			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2470379</guid>
			<description>
				<![CDATA[ECC directs airline to submit financial projections including income, expenses]]>
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				<![CDATA[Pakistan&rsquo;s economic managers have voiced concern over alleged violation of the terms of a loan acquired by Pakistan International Airlines (PIA) to address the financial challenges faced by Roosevelt Hotel, New York, which is owned by the airline.

Sources told The Express Tribune that the matter was taken up during a recent meeting of the Economic Coordination Committee (ECC) of the cabinet, where it was highlighted that PIA had allegedly flouted the terms of a loan agreement reached with the National Bank of Pakistan (NBP).

During discussion, the arrangement made with the bank regarding the loan, which was endorsed by the Finance Division, and the bank&rsquo;s concern over PIA&rsquo;s failure to meet its commitment were considered.

The ECC showed its concern about the violation of loan terms. It also discussed the litigation initiated by the labour union and its impact.

The economic decision-making body gave directives that PIA Investment Limited, the holding company of PIA, should immediately comply with the loan terms including the conditions related to the &ldquo;lock box&rdquo;.

It was further directed that PIA would submit to the ECC its financial projections for the remaining loan period based on its estimated income and expenditure through the Aviation Division.

The Aviation Division, while briefing the ECC about the case, informed meeting participants that the Finance Division had arranged $142 million by acquiring a loan from the NBP.

Thereafter, the ECC, while considering the case on August 31, 2021, allowed the utilisation of $10 million out of the $18 million allocated for pension fund withdrawal to avoid penal action against Roosevelt Hotel by the local authorities.

PIA management told the committee that until now Roosevelt Hotel had utilised $134 million out of the loan amount.

The balance of $8 million was still available with the bank. The need for settling pension fund withdrawal liabilities had arisen due to the closure of the hotel in December 2000.

However, the hotel was reopened for business in May 2023 with the approval of the cabinet. The pension liability has now been deferred post-settlement agreement dated May 10, 2023 between Roosevelt Hotel and the employees union.

Therefore, PIA Investment Limited requested for diverting the unutilised amount of $8 million to pay for severance and other pressing operational expenses.

The ECC was informed that the Finance Division while giving its views had stated that the earlier allocation of $10 million from the pension fund liabilities had been approved. Therefore, the ECC&rsquo;s nod may be obtained in that case.

The Aviation Division requested the ECC that PIA Investment Limited should be allowed to utilise the requested $8 million from the pension fund liabilities lying with the NBP to meet severance and other pressing operational expenses of Roosevelt Hotel.

The ECC considered the summary titled &ldquo;Financial challenges of Roosevelt Hotel, New York &ndash; request for GOP support&rdquo;, submitted by the Aviation Division, and approved the proposal.

Published in The Express Tribune, June 8th, 2024.

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			<title>PIA bidder proposes reinvestment of proceeds</title>
			<link>https://tribune.com.pk/story/2469993/pia-bidder-proposes-reinvestment-of-proceeds</link>
			<comments>https://tribune.com.pk/story/2469993/pia-bidder-proposes-reinvestment-of-proceeds#comments</comments>
			<pubDate>Wed, 05 Jun 24 20:36:16 +0500</pubDate>
			<dc:creator>
				<![CDATA[Salman Siddiqui]]>
			</dc:creator>
			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2469993</guid>
			<description>
				<![CDATA[Says it will help fix airline’s issues, make profit in future]]>
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				<![CDATA[In an attempt to expand footprint into new sectors of the economy including aviation and corporate farming, renowned businessman Arif Habib has proposed that the government should reinvest the proceeds from the privatisation of Pakistan International Airlines (PIA) back into the national carrier, as the state will continue to hold a 49% stake.

Arif Habib Corporation is part of one of the six consortiums which have been pre-qualified for offering bids for the airline sometime in August 2024.

Addressing media about his company&rsquo;s plans to further diversify the Arif Habib Group&rsquo;s business portfolio, Group Chairman Habib said PIA was carrying a negative equity of Rs50-55 billion and liabilities of Rs200 billion.

The government should reinvest the privatisation proceeds in the airline instead of using them for other purposes. &ldquo;This will help fix the airline&rsquo;s issues soon and earn profit in future.&rdquo;

He said the government should also give a sound plan to the potential bidders before the submission of bids, carrying timelines to repay the outstanding dues to entities like the Civil Aviation Authority (CAA) and Pakistan State Oil (PSO).

He emphasised that the authorities concerned should give enough time to the new partner to address the airline&rsquo;s challenges and pay dues. &ldquo;Repaying the dues immediately after buying the stake may not work well.&rdquo;

He said the Privatisation Commission should give enough time of about four to six weeks for due diligence and evaluation the airline.

Earlier, Arif Habib was also part of a consortium which expressed interest in acquiring Pakistan Steel Mills (PSM) during General Pervez Musharraf&rsquo;s government. A top court, however, suspended the potential deal after finding that the privatisation process violated some mandatory laws.

Habib said they had recently acquired 50,000 acres of land in Punjab for corporate farming, as the SIFC was striving to attract foreign and local investment in the agriculture sector to increase production by using modern technology and techniques.

Referring to his mega real estate project, Naya Nazimabad, in Karachi, the business tycoon said they are going to introduce the global business practice of selling tokens for the residency project, enabling small investors to buy stakes in flats and apartments instead of acquiring full ownership due to the lack of financing. Later, the investors may sell the tokens or buy more. The purchase of 10 tokens will enable the investors to become the owner of an apartment or a flat.

He said his fertiliser business is performing well these days. However, cement and steel making is still under stress amid economic slowdown.

Interest rate, payment

He anticipated that the State Bank of Pakistan (SBP) would cut the key policy rate by two percentage points to 20% in the monetary policy meeting scheduled for June 10, believing the significant deceleration in inflation reading to a two-and-a-half-year low at 11.8% in May has given a strong call to the central bank for the rate cut.

He projected that the interest rate would be cumulatively reduced by seven percentage points over the next one year to 15%. It will cut interest payments by a huge Rs3 trillion and create fiscal space for the government to expedite economic activities.

He said the volume of interest payments has grown to Rs9 trillion this fiscal year compared to a mere Rs1.5 trillion some three years ago.

He said interest payments against the mounting debt spiked due to the jacking up of interest rate by a cumulative 15 percentage points in the past three years to 22% from 7%.

Published in The Express Tribune, June 6th, 2024.

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			<title>Six consortiums pre-qualify for PIA bid</title>
			<link>https://tribune.com.pk/story/2469652/six-consortiums-pre-qualify-for-pia-bidding</link>
			<comments>https://tribune.com.pk/story/2469652/six-consortiums-pre-qualify-for-pia-bidding#comments</comments>
			<pubDate>Mon, 03 Jun 24 20:03:55 +0500</pubDate>
			<dc:creator>
				<![CDATA[Shahbaz Rana]]>
			</dc:creator>
			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2469652</guid>
			<description>
				<![CDATA[Marks second extension to privatisation process; bidding process now expected in August]]>
			</description>
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				<![CDATA[The privatisation process of Pakistan International Airlines (PIA) has taken another turn with the government pre-qualifying six consortiums for bidding, while disqualifying two others due to concerns about their financial standing. This marks the second extension to the original deadline, with the bidding process now expected to take place in August.

The decision comes amidst a continued ban imposed by the European Union (EU) on PIA flights within its airspace due to &ldquo;safety concerns.&rdquo;

The three consortiums deemed strongest due to their financial strength and experience in the aviation sector include,&nbsp;
Fly-Jinnah-Air-Arabia Consortium:&nbsp;

This consortium combines the expertise of Fly-Jinnah, a new Pakistani airline, with the established Middle Eastern carrier, Air Arabia.

Pak Ethanol-AirSial Limited- Serene Airlines Private Limited- Liberty Daharki Power Limited Consortium:&nbsp;
This group brings together several companies with diverse backgrounds, including Pak Ethanol, a leading ethanol producer, AirSial Limited, a Pakistani domestic airline, Serene Airlines, a private airline, and Liberty Daharki Power Limited, an energy company.

Younus Brother Holdings (Private) Limited-Pioneer Cement Limited Consortium:
This consortium involves Younus Brother Holdings, a Pakistani holding company, alongside Pioneer Cement Limited, a major cement manufacturer, Artistic Milliners Limited, a textile company, ANS Capital Private Limited, an investment firm, and Metro Ventures Private Limited, a real estate company.

In addition to these three, the Privatisation Commission also pre-qualified the following, Airblue Limited; a Pakistani low-cost airline, Arif Habib Corporation Limited; a leading financial services firm, and Blue World City; a real estate developer, with its consortium including Blue World Aviation and IRIS Communication Limited.

However, the consortium of Sardar Ashraf D Baluch Construction Company-Shanxi Construction Engineering Group Co Ltd (China) and Gerry&rsquo;s International were disqualified from bidding. Gerry&rsquo;s International was rejected due to a weak financial position, while Sardar Ashraf D Baluch Construction company was barred due to a lack of independent verification of its Chinese partner.

The privatisation ministry had initially informed the Special Investment Facilitation Council (SIFC) that it would complete the privatisation process in February this year, but the deadline was extended to June and subsequently to August. The ministry remains committed to the strategic sale of PIA by August 14th.

The pre-qualification process involved a thorough review of Statement of Qualifications (SOQs) submitted by eight interested parties. The Privatisation Commission Board, under the chairmanship of Minister for Privatisation Abdul Allem Khan, evaluated the technical, financial, and documentary requirements outlined in the RSOQ before making its final decision.

The pre-qualified parties will now move on to the next stage of the bidding process, where they will be invited to conduct due diligence. This process is expected to take between six to eight weeks.

Despite the government&rsquo;s efforts, the lack of foreign interest in acquiring a leading stake in PIA raises concerns about the success of the privatisation process. No foreign company or international airline emerged as a lead consortium, indicating limited interest in taking over the loss-making airline.

This scenario has effectively closed the door to a potential government-to-government deal.

The government aims to sell between 51% to 100% of PIA&rsquo;s stake to the private sector, hoping to alleviate the airline&rsquo;s financial burden. However, foreign investors are limited to acquiring a maximum of 49% stake, and any larger investment would require the formation of a consortium with local investors.

The government has already restructured PIA&rsquo;s balance sheet and transferred its debt to a holding company, assuming responsibility for debt taken from commercial banks. However, PIA&rsquo;s equity remains negative, and any new investor would need to invest hundreds of millions of dollars to ensure the airline&rsquo;s operational viability and sustainability.

The ongoing ban imposed by the EU on PIA flights adds another layer of complexity to the privatisation process. In its latest meeting, the EU determined that there were insufficient grounds to amend the current list of air carriers prohibited from operating within the EU. The EU Air Safety Committee has stated that continuous monitoring of the safety situation and developments in Pakistan is crucial, requiring regular technical meetings in Brussels and progress reports from the Pakistan Civil Aviation Authority (PCAA).

Published in The Express Tribune, June 4th, 2024.

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			<title>Govt ally opposes PIA sell-off</title>
			<link>https://tribune.com.pk/story/2467882/govt-ally-opposes-pia-sell-off</link>
			<comments>https://tribune.com.pk/story/2467882/govt-ally-opposes-pia-sell-off#comments</comments>
			<pubDate>Thu, 23 May 24 04:51:32 +0500</pubDate>
			<dc:creator>
				<![CDATA[Our Correspondent]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2467882</guid>
			<description>
				<![CDATA[Minister says privatisation of airline will be transparent]]>
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				<![CDATA[The senators of the PPP, a leading party in the ruling alliance, on Wednesday opposed the privatisation of the Pakistan International Airlines (PIA) during a session of the upper house of parliament -- in a development that might threaten the fragile government set-up in the Centre.

PPP senators Quratulain Marri, Zamir Hussain Ghumro, Muhammad Aslam Abro, Poonjo Bheel, and Syed Kazim Ali Shah moved a calling attention notice over the PIA&rsquo;s privatisation.

Speaking on the notice, Senator Quratulain said the PIA was the country&rsquo;s national carrier and should be run under the public-private partnership mode.

She added that the salaries of the PIA employees had not been increased for years and the process of its privatisation was not transparent.

In response, Privatisation Minister Abdul Aleem Khan said the PIA&rsquo;s accumulated loss had reached Rs830 billion.
He continued that it had to be seen who was responsible for unnecessary recruitments in the PIA.

&ldquo;This loss was not accumulated during the tenure of a single government. It took a long period of time to reach here.&rdquo;
The minister noted that it was not the job of a government to run businesses but its primary responsibility was making policies.

He highlighted that the PIA had only 18 planes, while there were 10,000 employees working in the airline.

Pointing out that eight companies were participating in the privatisation of PIA, he said the final bidding process would be broadcast live on TV and nothing would be hidden from the people and their representatives.

Read&nbsp;PIA board approves privatisation plan amid IMF talks

&ldquo;I assure you that the privatisation of the PIA is taking place in a completely transparent manner.&rdquo;
Aleem said 51% shares of the PIA were being given to private ownership.

&ldquo;If more aircraft are added to the PIA&rsquo;s fleet after its privatisation, the number of employees won&rsquo;t be that high.&rdquo;
The minister said the PIA had the best staff and pilots. However, he added that no government could afford to keep releasing Rs100 billion for the airline every year.

Islamabad has for years been pumping billions of dollars into cash-bleeding state-owned enterprises to keep them afloat, including the PIA which is in its final phase of being sold off.

Pakistan has listed 25 entities and assets on its privatisation list, including the PIA.

Privatisation of loss-making SOEs has long been on the International Monetary Fund&rsquo;s (IMF) list of recommendations for Pakistan, which is struggling with a high fiscal shortfall and a huge external financing gap.

Prime Minister Shehbaz Sharif recently announced that Pakistan would privatise all SOEs, with the exception of strategic entities -- broadening its initial plans to sell only loss-making ones.]]>
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			<title>PIA flight to Toronto grounded in Karachi</title>
			<link>https://tribune.com.pk/story/2467139/pia-flight-to-toronto-grounded-in-karachi</link>
			<comments>https://tribune.com.pk/story/2467139/pia-flight-to-toronto-grounded-in-karachi#comments</comments>
			<pubDate>Sat, 18 May 24 05:11:41 +0500</pubDate>
			<dc:creator>
				<![CDATA[Our Correspondent]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2467139</guid>
			<description>
				<![CDATA[The pilot chose to land rather than fly, after a technical fault emerged]]>
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				<![CDATA[PIA&rsquo;s flight PK-781 was grounded in Karachi after a technical fault.

The flight was heading to Toronto from Islamabad but it was grounded at Jinnah Terminal Karachi after a technical fault emerged.

According to PIA Spokesperson Abdullah Khan, the fault was minor but the pilot chose to land rather than continue the long flight through the Atlantic Ocean.

The flight is now scheduled to take off on Saturday at 1pm.

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			<title>Business magnates, local airlines show interest in PIA</title>
			<link>https://tribune.com.pk/story/2467119/business-magnates-local-airlines-show-interest-in-pia</link>
			<comments>https://tribune.com.pk/story/2467119/business-magnates-local-airlines-show-interest-in-pia#comments</comments>
			<pubDate>Fri, 17 May 24 21:10:33 +0500</pubDate>
			<dc:creator>
				<![CDATA[Our Correspondent]]>
			</dc:creator>
			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2467119</guid>
			<description>
				<![CDATA[No foreign firm has submitted documents for PIA’s acquisition as consortium leader]]>
			</description>
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				<![CDATA[Local real estate magnates, domestic airlines and industrialists have shown interest in acquiring the ailing Pakistan International Airlines (PIA) while no foreign company has submitted documents for prequalification as a lead consortium.

The Ministry of Privatisation on Friday announced that in response to the Request for Proposals, eight consortia submitted papers till the expiry of the deadline on Friday evening.

The government had given a two-week extension for filing papers in the hope that at least three international bidders would come forward. But no new party emerged despite the extension.

Two weeks ago, Privatisation Minister Abdul Aleem Khan claimed that 10 prospective investors had submitted Expressions of Interest (EOI) for the privatisation of PIA. However, the ministry on Friday announced that only eight parties submitted documents.

The privatisation ministry has released a partial list of parties. It only gave the lead consortium names but did not disclose the names of members of the consortia. Prime Minister Shehbaz Sharif has instructed to ensure full transparency in the privatisation programme.

The development came amid the International Monetary Fund (IMF)&rsquo;s focus on privatisation of Pakistan&rsquo;s bleeding power sector. Pakistani authorities have briefed the lender about the short to medium-term privatisation programme.

During meetings, according to sources, the IMF has clearly said that the privatisation of power distribution companies will be the policy action that it will seriously pursue during the next loan programme.

But before sell-off, the National Electric Power Regulatory Authority (Nepra) and the federal government will have to make decisions on multi-year tariff adjustments and uniform tariff regimes. The uniform tariff policy has caused more inefficiency.

The government wants to sell 51% to 100% stake in PIA to the private sector aimed at offloading losses of the airline. But foreign investors cannot acquire more than 49% shares and if they want to invest more they will have to make a consortium with local investors.

The government has already cleared the balance sheet of PIA and parked its debt in a holding company. It also took responsibility of the PIA debt taken from commerciala banks.

Details released by the Ministry of Privatisation showed that no foreign company or international airline emerged as the lead consortium, indicating their minimal interest.

The Privatisation Commission had hired a financial adviser at a hefty fee to undertake the transaction.

The privatisation ministry said that in response to the invitation for EOI, it received the Statement of Qualification from eight bidders.

Among the interested parties are Fly Jinnah and Airblue &ndash; the two prominent players of the aviation industry.

Pakistan&rsquo;s business mogul Arif Habib Corporation has also shown interest. Sardar Ashraf D Baluch Construction Company and Shanxi Construction Engineering Group Co Ltd (China) have submitted the Statement of Qualification as one consortium. Gerry&rsquo;s International is another contender.

Younus Brothers and the Lucky Group are also in the race. Another consortium is led by Pak Ethanol. Real estate player Blue World City has also shown interest, according to the privatisation ministry.

The Privatisation Commission will now carry out the pre-qualification process in line with the criteria laid down in the Request for Statement of Qualification. Only pre-qualified parties will be invited for the next stage of bidding, said the ministry.

Any party with a minimum net worth of Rs30 billion was eligible to submit documents. This opened avenues for the richest Pakistani families to take interest in the airline. There are no stringent conditions related to the aviation industry experience.

Published in The Express Tribune, May 18th, 2024.

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&nbsp;]]>
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			<title>Pakistan to sell all SOEs except strategic ones: PM</title>
			<link>https://tribune.com.pk/story/2466505/pakistan-to-sell-all-soes-except-strategic-ones-pm</link>
			<comments>https://tribune.com.pk/story/2466505/pakistan-to-sell-all-soes-except-strategic-ones-pm#comments</comments>
			<pubDate>Tue, 14 May 24 06:19:49 +0500</pubDate>
			<dc:creator>
				<![CDATA[Our Correspondent]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2466505</guid>
			<description>
				<![CDATA[Privatisation of both profitable and losing-making entities given nod]]>
			</description>
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				<![CDATA[Amid the ongoing talks with an International Monetary Fund (IMF) mission for a fresh loan, Prime Minister Shehbaz Sharif on Tuesday announced that Pakistan would privatise all state-owned enterprises (SOEs), with the exception of strategic entities -- broadening its initial plans to sell only loss-making ones.

The decision was announced after the premier chaired a review meeting of the privatisation process of loss-making SOEs, according to a statement issued by the PM&rsquo;s Office.

The participants of the meeting gave the nod to the sale of both profitable and loss-making SOEs while discussing a roadmap for privatisation from 2024 to 2029.

During the huddle, PM Shehbaz instructed all federal ministries to take necessary action in this connection and cooperate with the Privatisation Commission.

He noted that the offloading of the SOEs was aimed at ensuring a business and investment-friendly environment as well saving taxpayers&#39; money.

&quot;The loss-making SOEs should be privatised on a priority basis,&quot; the premier instructed.

The participants of the huddle a pre-qualified panel of experts was being appointed in the Privatisation Commission to speed up the process.

Directing the relevant authorities to ensure transparency, the premier ordered to televise the privatisation process of the Pakistan International Airlines (PIA), including its bidding.

Following the premier&rsquo;s instructions, the privatisation process of other institutions will also be broadcast live.

A roadmap of the Privatisation Programme 2024-2029 was presented during the meeting and the ministers were informed about the progress made so far for the sale of the SOEs.

It was said that the pre-qualification process for the PIA&#39;s privatisation would be completed by the end of the month and that the privatisation of power distribution companies had also been included in the programme.

The announcement came a day after an IMF mission opened talks in Islamabad for a new long-term Extended Fund Facility, following Pakistan&#39;s completion of a $3 billion standby arrangement in April this year that averted a sovereign debt default last summer.

Read Profitable SOEs erased from sell-off list

Privatisation of loss-making SOEs has long been on the IMF&#39;s list of recommendations for Pakistan, which is struggling with a high fiscal shortfall and a huge external financing gap.

Foreign exchange reserves are hardly enough to meet a couple of months of controlled imports. The IMF says SOEs in Pakistan hold sizable assets in comparison with most Middle East countries, at 44% of the GDP in 2019, yet their share of employment in the economy is relatively low. It estimates almost half of the SOEs operated at a loss in 2019.

Past privatisation drives have been patchy, mainly due to a lack of political will, market watchers say. &ldquo;Any organisation that is involved in purely commercial work can&#39;t be strategic by its very nature, which means there can&#39;t be any strategic commercial SOEs,&rdquo; former privatisation minister Fawad Hasan Fawad told Reuters on Tuesday
&nbsp;&quot;So to me there are really no strategic SOEs,&quot; he said.

&quot;The sooner we get rid of them the better. But this isn&#39;t the first time we have heard a PM say this and this may not be the last till these words are translated into a strategic action plan and implemented.&quot;

Pakistan has for years been pumping billions of dollars into cash-bleeding SOEs to keep them afloat, including the PIA, which is in its final phase of being sold off, with a deadline later this week to seek expressions of interest from potential buyers.

Pakistan has listed 25 entities and assets on its privatisation list, including the PIA. A majority of the entities are in the power sector, including four power plants, two of which are over 1,200MWs, as well as 10 generation and distribution companies.

The list also includes the valuable Roosevelt hotel in New York&#39;s Manhattan and two insurance companies. The pre-qualification process for PIA&#39;s selloff will be completed by end-May, the privatisation ministry told Tuesday&#39;s meeting, adding that discussions were underway to sell the airline-owned Roosevelt Hotel in New York.

It said a government-to-government transaction on First Women Bank Ltd was being discussed with the United Arab Emirates.

The ministry continued that that the power distribution companies had also been included in the privatisation plan for 2024-2029.

(With input from agencies)]]>
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			<title>No strategic SOEs, minister pushes for privatization</title>
			<link>https://tribune.com.pk/story/2466234/no-strategic-soes-minister-pushes-for-privatization</link>
			<comments>https://tribune.com.pk/story/2466234/no-strategic-soes-minister-pushes-for-privatization#comments</comments>
			<pubDate>Sun, 12 May 24 10:23:11 +0500</pubDate>
			<dc:creator>
				<![CDATA[Our Correspondent]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2466234</guid>
			<description>
				<![CDATA[Aurangzeb reiterates the government’s resolve to bring retailers into tax net]]>
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				<![CDATA[Finance Minister Muhammad Aurangzeb dismissed the concept of &#39;strategic&#39; state-owned enterprises (SOEs), advocating for broad privatisation strategy and reiterating the government&#39;s commitment to tax retailers.

Aurangzeb&#39;s statements came during a pre-budget conference in Lahore, following Deputy Prime Minister Ishaq Dar&#39;s announcement that the PML-N government would narrow its business scope to strategic and essential SOEs, with a plan to reduce their number after thorough scrutiny.

Chairing the Cabinet Committee on Privatisation (CCoP) meeting, also attended by the finance minister, Dar had said privatisation of loss-making SOEs was a priority for the government.

The meeting had noted that 40 SOEs were currently categorised as strategic but respective ministries would submit their details to the Cabinet Committee on State-Owned Enterprises (CCoSOE) and the CCoSOE would determine the status of the SOEs to be categorised as strategic or essential entities.

However, speaking at the conference, the minister said there was no such as a strategic SOE.

Commenting on concerns regarding the privatisation of the Pakistan International Airlines (PIA) and the Islamabad Airport, the minister said the government was not just looking at foreign investors. &ldquo;There are local and foreign investors who are bidding [for the SOEs],&rdquo; he said.

He said if this country had to come out of difficulties, the private sector would have to step forward.

In reference to expanding the tax net, he stated that while the government was prepared to engage in discussions with retailers, it remained steadfast in its commitment to bringing them into the tax net.

&ldquo;Our retailer brothers who are currently outside the tax net should voluntarily enter the tax net. We will provide them with all kinds of facilities. People think that when they come into the net, they will be unnecessarily harassed. They are wrong: we will rather facilitate them.&rdquo;

He said in April, retailers were given the facility of registration on a voluntary basis, but even today they resist coming into the tax net.

Commenting on a fresh International Monetary Fund (IMF) loan programme, he said a larger and longer programme was needed to bring &ldquo;permanence in macroeconomic stability and structural reforms&rdquo;. He said currently, cash worth eight to ten trillion rupees was circulating in the market in Pakistan.

&ldquo;If structural changes are not made in taxes in the 24th IMF programme, then we will have to go to the 25th programme and we will have to change everything.

&ldquo;The IMF team has come to Pakistan; this programme will be very important and long-term. We have to increase the tax net, not just for the IMF, but for Pakistan,&rdquo; he added.

The finance minister stated that Pakistan is moving towards complete digitalization, which will increase revenues and bring transparency.

He emphasized that economic indicators have improved significantly in the past seven to eight months. &ldquo;Currently, the current account deficit is less than one billion dollars, the currency is stable, inflation is decreasing, and the stock exchange is at its highest level in history,&rdquo; he said.

He also talked about energy reforms, saying that there were &ldquo;leakages&rdquo; and stressed the need for stopping theft. He said that changes were being brought to the boards of distribution companies (Discos) in order to bring in those from the private sector for &ldquo;better corporate governance&rdquo;. &ldquo;You will see how we bring those Discos towards concessions or privatisation or a combination of both,&rdquo; he said.

The minister said the government is taking all these steps not under the pressure of the IMF but for Pakistan &ldquo;because the country is supreme to all of us&rdquo;.

&ldquo;The government is taking all possible measures and ensuring institutional reforms to restore confidence of the business community in the tax revenue collection authorities, especially the Federal Board of Revenue (FBR).

&ldquo;Effective steps are also being put in place to enhance financial support for various sectors out of which agriculture, information technology (IT) and SME (small and medium enterprises) are priority sectors,&rdquo; he added.

The Pre-Budget Conference FY 2024-25 was jointly organized by the Federation of Pakistan Chambers of Commerce and Industry and a newspaper. Former federal minister Hafeez Pasha, Almas Hyder, Dr Fiaz Ahmed Chaudhry, Advocate Dr Ikram-ul-Haq, Kamran Arshad and others also spoke on the occasion.

WITH INPUT FROM APP]]>
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			<title>PIA plans to ‘expand’ flight operations</title>
			<link>https://tribune.com.pk/story/2466086/pia-plans-to-expand-flight-operations</link>
			<comments>https://tribune.com.pk/story/2466086/pia-plans-to-expand-flight-operations#comments</comments>
			<pubDate>Sat, 11 May 24 05:49:35 +0500</pubDate>
			<dc:creator>
				<![CDATA[Our Correspondent]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2466086</guid>
			<description>
				<![CDATA[Airline’s official says future business plan includes addition of more aircraft]]>
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				<![CDATA[With the European Union expected to lift the ban on the Pakistan International Airlines (PIA) in the near future, the national carrier plans to expand its flight operations.

&ldquo;Flights to Europe will resume immediately after the restrictions are lifted,&rdquo; PIA Chief Commercial Officer Nausherwan Adil said in a meeting with travel agents in Lahore.

&ldquo;The ban on flights to the UK is also likely to end,&rdquo; he added.

&ldquo;Plans to resume flights to the UK have also been completed.&rdquo;

Adil praised the role of travel agents, saying that they were the airline&rsquo;s long-standing companions and in fact its &ldquo;business partners&rdquo;.

The PIA official explained that the national carrier&rsquo;s future business plan also included addition of more aircraft.

He noted that a large number of Pakistanis were residing all over the world and travelled to the country every year.

&ldquo;Overseas Pakistanis are our real assets.&rdquo;

The PIA official said all possible steps were being taken to provide direct flights to the country to overseas Pakistanis.

Adil hoped that the PIA&rsquo;s relationship with the travel agents would grow stronger in the coming days.

The PIA official explained that the national carrier&rsquo;s business partnerships with various major airlines were aimed at providing convenience to its passengers.

He continued that the PIA strived to provide the best possible services to its passengers with its limited air fleet.

The PIA official pointed out that Lahore was the top station of the national carrier in terms of generating income.

He noted that travel agents had supported the PIA during all its difficult times.

Adil expressed his gratitude to travel agents on behalf of the airline&rsquo;s management.]]>
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			<title>First PIA pre-Hajj flight departs from Karachi</title>
			<link>https://tribune.com.pk/story/2466108/first-pia-pre-hajj-flight-departs-from-karachi</link>
			<comments>https://tribune.com.pk/story/2466108/first-pia-pre-hajj-flight-departs-from-karachi#comments</comments>
			<pubDate>Sat, 11 May 24 08:36:06 +0500</pubDate>
			<dc:creator>
				<![CDATA[APP]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2466108</guid>
			<description>
				<![CDATA[PIA's pre-Hajj operation is set to conclude on June 10]]>
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				<![CDATA[PIA commenced its pre-Hajj operations on Saturday&nbsp;with the departure of flight PK 743 from Jinnah International Airport in Karachi.

PIA CEO Amanullah Qureshi, along with other senior PIA officials, bid farewell to the first group of Hajj pilgrims Qureshi conveyed his gratitude to the pilgrims for choosing PIA to commence their Hajj journey.&nbsp;

The flight departed for Madina early morning on Saturday.

The COO expressed confidence in PIA&#39;s ability to execute the Hajj operation smoothly, citing examples of their prior successful execution of pilgrimage flight operations. He reaffirmed that PIA&#39;s staff will provide all support and services to the pilgrims.

Furthermore, the PIA spokesman announced that the national airline will facilitate over 34,000 Hajj pilgrims from Pakistan to Saudi Arabia.

Among them, approximately 19,000 pilgrims will travel under the official Hajj scheme, while 15,000 will utilize the private Hajj scheme, served by 170 PIA Hajj flights operating from various cities including Karachi, Lahore, Multan, Islamabad, Peshawar, Quetta, Sialkot, and Sukkur.

PIA&#39;s pre-Hajj operation is set to conclude on June 10.

Read PIA offers 20% discount to Umrah pilgrims

Previously, the airlines said that the immigration of pilgrims would take place in Pakistan under the Road to Makkah project.

According to the PIA guidelines, the pilgrims were informed to reach the airport 6 hours before the flight time. They must carry with them a smartphone with the ministry-recommended app installed in it besides the vaccination card from the National Database and Registration Authority (NADRA).

The passengers are strictly forbidden from carrying nail cutters, scissors, razors, lighters, toys with batteries, matches, power banks, cylinders, emergency lights, lanterns, stoves, inflammable substances in their belongings.

According to a spokesperson for the religious affairs ministry, flights for the first 15 days would ferry the pilgrims to Madina airport, while most of the flights between May 24 and June 9 would land at Jeddah airport. Besides Karachi, the flights would be operated from Islamabad, Lahore, Multan, Sialkot, Quetta and Sukkur.

The return flights would commence on June 20.

&nbsp;]]>
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			<title>PSO proposes swapping debt for stake in public sector companies</title>
			<link>https://tribune.com.pk/story/2465882/pso-proposes-swapping-debt-for-stake-in-public-sector-companies</link>
			<comments>https://tribune.com.pk/story/2465882/pso-proposes-swapping-debt-for-stake-in-public-sector-companies#comments</comments>
			<pubDate>Thu, 09 May 24 16:29:19 +0500</pubDate>
			<dc:creator>
				<![CDATA[Reuters]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category><category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2465882</guid>
			<description>
				<![CDATA[Government, with a stake of about 25%, is biggest shareholder of PSO, but private shareholders own the rest]]>
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				<![CDATA[Pakistan State Oil (PSO), the country&#39;s largest oil marketer, says it is in talks with the government on a plan to acquire stakes in public sector energy companies and offset mounting debt it is owed by firms such as Pakistan International Airline (PIA).

Stopping the pile-up of unresolved debt across Pakistan&#39;s power sector, and ultimately settling it, is a top concern of the International Monetary Fund, with which Islamabad begin talks this month for a new long-term loan deal.

&quot;Everything will be done through competitive bidding and we will participate and if we win, the stakes will be offset against (PSO&#39;s receivables),&quot; said Syed Muhammad Taha, the managing director and chief executive of state-backed PSO.

&quot;That is our proposal and this is under consideration, so we are working with the government,&quot; Taha said in an interview on Wednesday with Reuters, which is the first to report the plan.

The federal government, with a stake of about 25%, is the biggest shareholder of PSO, but private shareholders own the rest.

Read more:&nbsp;SECP okays PIACL restructuring

Government officials, including the petroleum minister and the information minister, did not reply to a Reuters request for comment.

Total circular debt in Pakistan&#39;s power and gas sectors stood at 4.6 trillion rupees ($17 billion), or about 5% of GDP by June 2023, the IMF says.

Circular debt is a form of public debt that stems in part from failure to pay dues along the power sector chain, starting with consumers and moving to distribution companies, which owe power plants, which then have to pay fuel supplier PSO.

The government is either the biggest shareholder, or outright owner of most these companies, making it tough to resolve debt as fiscal tightening leaves it strapped for cash.

Among other steps sought by the IMF, Pakistan has raised energy prices to stop the build-up of debt. But the accumulated amount still has to be resolved.

Taha said the IMF reforms helped the sector by boosting creditors&#39; ability to pay, which will continue to improve.

PSO&#39;s aggregate receivables from government agencies and autonomous bodies stood at 499 billion rupees ($1.8 billion), the largest share owed by gas provider Sui Northern Gas (SUIN.PSX), whose largest shareholder is the government.

PSO&#39;s annual report last year said the crisis of owed debt was a serious issue for it.

Taha said PSO had initially floated the idea of acquiring stakes or complete ownership of assets such as power plants in Nandipur in the Punjab province and Guddu in Sindh, as well as the government-owned holding entity for power generation companies.

It also discussed equity stakes in profitable public sector companies such as the Oil and Gas Development Co (OGDC.PSX), he added.

PIA deal

Taha said PSO was also a part of the broader settlement framework for the privatisation of PIA, which would potentially include a &quot;clean asset swap&quot; and a stake in the airline&#39;s non-core assets, such as property.

The government is putting on the block a stake ranging from 51% to 100% in debt-ridden PIA as part of the public-sector reforms sought by the IMF.

In March, media said the principal alone that PIA owed PSO for fuel supply amounted to roughly 15.8 billion rupees ($57 million).

Taha added that he expected modest growth in demand for petroleum products as the economy opens up, thanks to lower interest rates and higher disposable income.

As economic conditions improve, he added, PSO is working with big strategic investors from China and the Middle East to upgrade and expand its refinery arm, Pakistan Refinery Ltd (PKRF.PSX), opens new tab.

PSO has a network of 3,528 retail outlets in addition to 19 depots, 14 airport refuelling facilities, operations at two seaports, and Pakistan&#39;s largest storage capacity of 1.14 million tonnes.]]>
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			<title>Guidelines issued for pilgrims as pre-Hajj flights begin</title>
			<link>https://tribune.com.pk/story/2465784/guidelines-issued-for-pilgrims-as-pre-hajj-flights-begin</link>
			<comments>https://tribune.com.pk/story/2465784/guidelines-issued-for-pilgrims-as-pre-hajj-flights-begin#comments</comments>
			<pubDate>Thu, 09 May 24 05:09:01 +0500</pubDate>
			<dc:creator>
				<![CDATA[Naeem Asghar]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2465784</guid>
			<description>
				<![CDATA[Two private airlines ferry 330 passengers to holy land; PIA flights commences tomorrow]]>
			</description>
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				<![CDATA[Two private airlines started the huge pre-Hajj flights operation on Wednesday night, while national flag-carrier Pakistan International Airlines (PIA) issued detailed guidelines for the intending pilgrims for their travel to the holy land.

PIA will start its pre-Hajj flights on Friday, May 10 (tomorrow). The one-month operation is spread over a total of 259 flights to ferry more than 68,000 pilgrims from different international airports of the country to Jeddah and Madina, Saudi Arabia.

The airlines said that the immigration of pilgrims would take place in Pakistan under the Road to Makkah project. The first flight would take off on Friday from Karachi, from where two private airlines flew in the night between Wednesday and Friday, carrying 330 pilgrims.

According to the PIA guidelines, the pilgrims must reach the airport 6 hours before the flight time. They must carry with them a smart phone with the ministry-recommended app installed in it besides the vaccination card from the National Database and Registration Authority (NADRA).

The passengers are strictly forbidden from carrying nail cutters, scissors, razors, lighters, toys with batteries, matches, power banks, cylinders, emergency lights, lanterns, stoves, inflammable substances in their belongings.

Each passenger is allowed to carry hand luggage, weighing 7 kilogrammes, and other luggage up to 40 kilogrammes. In case of excess weight, the passenger would be required to pay $5 per kilogramme additional charge, according to the guidelines.

Read&nbsp;Religious leaders unify on pilgrims&rsquo; code

On the return Hajj flights, the PIA said, the passengers should arrive at the Jeddah airport 10 hours before the flight and 7 hours before the flight at Madina airport. It warned that by not arriving on time, the passenger would be responsible for the cancellation of the ticket.

The PIA said that a passenger would be required to pay SAR35 per kilogramme for any extra baggage. It added that no pilgrim would allowed to carry Zamzam water in the personal baggage, instead, as the Saudi law, a bottle of 5-liter Zamzam water would be given to each pilgrim at the airport.

Meanwhile, two private airlines took off from Karachi airport, marking the beginning of the pre-Hajj flights. According to a spokesperson for the religious affairs ministry, the pre-Hajj flights operation would continue till June 10. The return flights would commence on June 20.

According to the spokesperson, the flights for the first 15 days would ferry the pilgrims to Madina airport, while most of the flights between May 24 and June 9 would land at Jeddah airport. Besides Karachi, the flights would be operated from Islamabad, Lahore, Multan, Sialkot, Quetta and Sukkur.

Separately, the religious affairs ministry held an online meeting, with the staff posted in Saudi Arabia and other cities about the Hajj arrangements. Religious Affairs Secretary Zulfiqar Haider chaired the meeting, also attended by Director-General Hajj Abdul Wahab Soomro.

During the meeting, the Hajj directors briefed the participants from Makkah. The secretary advised them to give importance to the feedback and opinions of the pilgrims. They said that pilgrims would be accommodated in Aziziya, Batha Quraish and Hayi Naseem in Makkah. Similarly, they added that all Pakistani Hajj pilgrims would be accommodated in Madinah.]]>
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			<title>Gerry’s Group, others among bidders for PIA</title>
			<link>https://tribune.com.pk/story/2465259/gerrys-group-others-among-bidders-for-pia</link>
			<comments>https://tribune.com.pk/story/2465259/gerrys-group-others-among-bidders-for-pia#comments</comments>
			<pubDate>Sun, 05 May 24 08:39:44 +0500</pubDate>
			<dc:creator>
				<![CDATA[Bloomberg]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2465259</guid>
			<description>
				<![CDATA[PM Sharif's stance reflects need to end taxpayer-funded subsidies for the struggling carrier]]>
			</description>
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				<![CDATA[Around ten initial bidders, including the Arif Habib Group and Gerry&#39;s,&nbsp;have shown interest in purchasing a majority stake in the&nbsp;state-owned&nbsp;Pakistan International Airlines (PIA).

According to a Bloomberg report, privatization minister Abdul Aleem Khan gave a briefing where he stated that three private-sector airlines that operate on domestic routes have also submitted bids. However, he refrained from disclosing the specific names of these airlines.

This initiative aligns with Pakistan&#39;s commitment to achieve economic reforms in line with the bailout conditions put forward by the International Monetary Fund (IMF).

Prime Minister Shehbaz Sharif&#39;s stance reflects the need to end taxpayer-funded subsidies for the struggling carrier, highlighting the urgency for structural changes.

The participation of private-sector airlines entertains the possibility of consolidation within the carrier industry and the infusion of new capital and expertise into PIA.

Moreover, the choice not to saddle the buyer with the majority of PIA&#39;s debt enhances the deal&#39;s appeal, rendering it more attractive to potential investors.

By extending the deadline for the submission of bids, it allows room for interested parties to exercise due diligence and understand the significance of this transaction.

The result of this privatization initiative will likely have broad and significant implications for Pakistan&#39;s aviation sector and wider economic panorama.]]>
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			<title>CCP okays PIA’s acquisition by Holdco</title>
			<link>https://tribune.com.pk/story/2465194/ccp-okays-pias-acquisition-by-holdco</link>
			<comments>https://tribune.com.pk/story/2465194/ccp-okays-pias-acquisition-by-holdco#comments</comments>
			<pubDate>Sat, 04 May 24 19:10:34 +0500</pubDate>
			<dc:creator>
				<![CDATA[Shahbaz Rana]]>
			</dc:creator>
			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2465194</guid>
			<description>
				<![CDATA[Says it won’t have impact on market, describes Holdco’s business as real estate]]>
			</description>
			<content:encoded>
				<![CDATA[The antitrust watchdog on Saturday announced the approval of the Scheme of Arrangements for the acquisition of 100% shareholding in Pakistan International Airlines Corporation Limited (PIACL) by a new company named PIA Holding Company Limited (Holdco).

In its order, the Competition Commission of Pakistan (CCP) said that the acquisition of PIA Corporation by PIA Holding Company would not have any material impact on the market. It described the nature of the holding company&rsquo;s business as real estate, which would own PIA&rsquo;s liabilities, specific business property, rights and obligations both inside and outside of Pakistan.

The CCP announced the decision two days after the Privatisation Commission (PC) board extended the date for submission of Expressions of Interest (EOI) by investors by 15 days. The commission was compelled to extend the date after a majority out of the 10 parties that bought bidding documents did not submit them. No foreign airline has shown interest in PIA&rsquo;s privatisation so far, although three domestic private airlines have participated in the process.

The CCP said that as per the approved scheme, Holdco would acquire 100% shareholding in PIA and the airline&rsquo;s non-core assets and non-core liabilities would also be transferred to Holdco. Holdco, a public limited company wholly owned by the government of Pakistan, was recently incorporated to take over specified assets, liabilities and subsidiaries of PIA, including its business, property, rights and obligations both domestically and internationally.

PIA, a publicly listed company, provides aviation and allied services such as engineering, handling, cargo, flight kitchen and training.

The relevant market identified in this case is the real estate market in Pakistan, as PIA owns properties across the country with homogenous competition conditions, said the CCP. It added that the core aviation activities and allied services of PIA would remain with the company and would not be transferred to Holdco. These core activities will be privatised.

The CCP&rsquo;s assessment concluded that the proposed transaction would not lead to the dominance of Holdco in the relevant market post-transaction, therefore, the CCP authorised the merger in phase-I.

The competition watchdog said that its approval of the merger demonstrated the commitment to furthering the government of Pakistan&rsquo;s economic revival plan, particularly in attracting investment through the Special Investment Facilitation Council (SIFC).

Earlier, the shareholders and creditors of PIACL approved the Scheme of Arrangements filed with the Securities and Exchange Commission of Pakistan (SECP). As part of the privatisation process, the federal cabinet approved the legal segregation and restructuring of PIACL, following which the Scheme of Arrangements was filed with the SECP in March. In a meeting of PIACL creditors on April 21, 2024, the restructuring plan and the Scheme of Arrangements were endorsed.

The Privatisation Commission stressed that the restructuring would deliver a significantly &ldquo;debt-light&rdquo; PIA, with a better cash flow, focused on aviation and providing a foundation for future growth to potential investors, while ensuring value creation for shareholders. According to the segregation plan, the government has transferred about Rs625 billion to the holding company before selling 51% to 100% stake of PIA. It has also approved the shifting of employees of the Precision Engineering Complex to the holding company.

Foreign investors cannot buy more than 50% shares under the Civil Aviation Act and Air Service Agreements. So, they would have to enter into an arrangement with local investors for acquiring majority shares.

The Precision Engineering Complex, Pakistan International Airlines Investment Limited which owns Roosevelt Hotel and Scribe Hotel, and certain real estate assets have been treated as non-core assets and shifted to the holding company.

All ancillary services including engineering, ground handling, cargo, flight kitchen and training, as core assets, have been kept in the main PIA for privatisation. But their treatment as core assets will depend on the willingness of investors to buy them. About Rs625 billion worth of liabilities are being transferred to the new holding company along with assets. These liabilities include a commercial bank debt of Rs268 billion.

A debt of Rs173 billion is due to be paid to the federal government and advances from subsidiaries are being shifted to the holding company. Similarly, all liabilities of Rs144 billion of the Civil Aviation Authority (CAA), Pakistan State Oil (PSO) and National Insurance Corporation Limited (NICL) are being transferred to the holding company.

A commercial debt of Rs16 billion owed to foreign commercial banks is being kept in PIA. Payables of Rs64 billion to the creditors, mainly lessors and fuel suppliers, are also being retained in PIA and offered to buyers.

Operational liabilities of Rs104 billion related to the fleet, employees&rsquo; deferred liabilities and trade payables are also being kept in PIA.

Published in The Express Tribune, May 5th, 2024.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.

&nbsp;]]>
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			<title>Govt reluctant to privatise key SOEs</title>
			<link>https://tribune.com.pk/story/2465084/govt-reluctant-to-privatise-key-soes</link>
			<comments>https://tribune.com.pk/story/2465084/govt-reluctant-to-privatise-key-soes#comments</comments>
			<pubDate>Fri, 03 May 24 20:14:48 +0500</pubDate>
			<dc:creator>
				<![CDATA[Shahbaz Rana]]>
			</dc:creator>
			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2465084</guid>
			<description>
				<![CDATA[Wealthiest families eye PIA amid govt’s resistance to privatisation efforts]]>
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				<![CDATA[As Pakistan&rsquo;s wealthiest families express interest in acquiring the struggling national flag-carrier, Prime Minister Shehbaz Sharif&rsquo;s government remains reluctant to sell at least 75% of commercial state-owned entities.

The government aims to maintain control in key sectors such as insurance, finance, road transport, logistics, and oil and gas production. Apart from Pakistan International Airlines (PIA) and power distribution companies, almost all commercial enterprises are excluded from privatisation.

This decision follows internal resistance to government privatisation efforts. Out of 87 eligible commercial entities, only 21 have been recommended for active privatisation, the Privatisation Ministry sources told The Express Tribune. Ministries have excluded 39 companies from privatisation without explanation and have not provided details for another 27 firms. Consequently, the government has selected only a quarter of the entities for privatisation, with some facing challenges due to lack of cooperation from government departments, they added.

Among the 21 state-owned enterprises shortlisted for privatisation by PM Sharif&rsquo;s government is PIA.

Domestic airlines such as Fly Jinnah, Air Sial, and Air Blue have obtained documents to participate in PIA&rsquo;s privatisation. Some may form joint ventures with foreign investors or international airlines, according to a Ministry of Privatisation official.

Privatisation Minister Abdul Aleem Khan announced that 10 prospective investors have submitted Expressions of Interest (EoI) for PIA&rsquo;s privatisation. However, not all investors have submitted documentation yet.

The Privatisation Commission board approved an extension of the submission deadline for PIA divestment interests, accommodating requests from interested parties.

Gerry&rsquo;s International, engaged in ground handling, has also expressed interest but requires more time for documentation, according to a senior ministry official. Financial advisors anticipate two to three more parties expressing interest soon. Consequently, the board extended the EoI deadline from May 3 to May 18 and established a pre-qualification committee to evaluate prospective investors.

The government has relaxed criteria for bidder participation, primarily requiring a minimum net worth of Rs30 billion. This has attracted interest from Pakistan&rsquo;s wealthiest families, with no stringent conditions related to aviation industry experience.

The government had advertised to invite investors to acquire majority stakes in PIA a month ago.

Prominent business figure Arif Habib and several players in the cement sector, such as the Tabba family of Lucky Cement, Habibullah Khan of Pioneer Cement, and Bestway Cement and Maple-Leaf Cement, have shown interest and obtained documentation for PIA&rsquo;s privatisation.

Two business groups from Sindh, Omni Group and D Baloch Construction firm, have also expressed interest, according to privatisation ministry officials. However, no regional airline has yet shown interest in acquiring stakes in PIA.

The government aims to sell stakes ranging from 51% to 100%. However, foreign investors cannot acquire more than 49% and are required to form a consortium with local investors if they wish to invest.

The government has restructured PIA&rsquo;s balance sheet and assumed its debt, parked in a holding company. It also took responsibility for PIA&rsquo;s debt from commercial banks.

Although PM Sharif has declared privatisation a priority, government ministries have not fully cooperated with the privatisation ministry, withholding information about potential privatisation candidates.

Of the 87 commercial entities, ministries have shared information for only 60, without explanation for omitting 37 entities. Despite longstanding inclusion on the privatisation list, 15 firms face challenges due to lack of ministry cooperation.

The privatisation ministry recommends prioritising the privatisation of loss-making entities and restricting government involvement to strategic interests.

Due to lack of cooperation from these ministries, the privatisation ministry suggests granting exclusive authority to the Cabinet Committee on SOEs to decide which entities to retain due to their strategic importance.

The Cabinet Division has opposed privatisation of the Pakistan Tourism Development Corporation and Printing Corporation of Pakistan. The Commerce Division has opposed privatisation of Pakistan Reinsurance Company Limited, National Insurance Company Limited, State Life Insurance Corporation of Pakistan, Trading Corporation of Pakistan, and Pakistan Expo Centre.

The communication ministry has opposed privatisation of National Highway Authority and the Pakistan Post Office.

The Finance Division has opposed privatisation of SME Bank Limited, National Bank of Pakistan, Industrial Development Bank of Pakistan, Pak-China Investment Company, Pak-Iran Investment Company, Pak-Libya Investment Company, Pak-Oman Investment Company, Pak-Kuwait, and Pak-Brunei Investment Company. The Finance Division has also opposed privatisation of National Investment Trust Limited.

The industry ministry has also not agreed to the privatisation of National Fertiliser Corporation, Pakistan Industrial Development Corporation, Pakistan Steel Mills, Small and Medium Enterprises Development Authority, State Engineering Corporation, and Utility Stores Corporation.

The information technology (IT) ministry has opposed further off-loading of shares of the Pakistan Telecommunication Limited.

Published in The Express Tribune, May 4th, 2024.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.

&nbsp;]]>
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			<title>PIA suspends Dubai, Sharjah flights as UAE hit by rains again</title>
			<link>https://tribune.com.pk/story/2464905/pia-suspends-dubai-sharjah-flights-as-uae-hit-by-rains-again</link>
			<comments>https://tribune.com.pk/story/2464905/pia-suspends-dubai-sharjah-flights-as-uae-hit-by-rains-again#comments</comments>
			<pubDate>Thu, 02 May 24 17:35:10 +0500</pubDate>
			<dc:creator>
				<![CDATA[Our Correspondent]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2464905</guid>
			<description>
				<![CDATA[National carrier says operations to resume as soon as situation improves]]>
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				<![CDATA[The Pakistan International Airlines (PIA) on Thursday said that its flights as well as those of other domestic air passenger carriers to Dubai and Sharjah would remain suspended for the time being because of another spell of torrential rains in the United Arab Emirates.

In a statement, a spokesperson for the national flag carrier said the flight operations for Dubai and Sharjah were badly affected because of the severe weather conditions.

The spokesperson added that some flights of the PIA were facing delays and cancellations because of the inclement weather in the UAE.

&ldquo;The PIA is very conscious of the inconvenience faced by its passengers,&rdquo; the spokesperson said.

&ldquo;As soon as the situation improves, the PIA will start its air operations [to the UAE] immediately.&rdquo;

Read more:&nbsp;Schools, offices shut as heavy rain returns to desert UAE

The spokesperson asked the affected passengers to contact the PIA&rsquo;s call centre at 786786111 for their flight information.

Schools and many offices were closed across the UAE as heavy rains returned just two weeks after record downpours that experts linked to climate change.

A lightning storm with high winds swept across the oil-rich monarchy overnight, with more than 50 millimetres of rain falling before 8am in some areas, the National Centre of Meteorology said.

Flooding was seen in some parts of Dubai and the city&rsquo;s airport.

The airport, the world&rsquo;s busiest in terms of international passenger traffic, cancelled 13 flights and diverted five, a spokesperson said.

(With input from AFP)]]>
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			<title>PIA sell-off fails to attract foreign investors</title>
			<link>https://tribune.com.pk/story/2464823/pia-sell-off-fails-to-attract-foreign-investors</link>
			<comments>https://tribune.com.pk/story/2464823/pia-sell-off-fails-to-attract-foreign-investors#comments</comments>
			<pubDate>Thu, 02 May 24 05:18:08 +0500</pubDate>
			<dc:creator>
				<![CDATA[Talib Faridi]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2464823</guid>
			<description>
				<![CDATA[Only two firms from Gulf countries bought documents but still haven’t submitted requests for tenders yet]]>
			</description>
			<content:encoded>
				<![CDATA[As the privatization process of the restructured Pakistan International Airlines (PIA) has kicked off, foreign companies are apparently not interested in acquiring the majority stakes in the national carrier, sources told The Express Tribune on Wednesday.


According to the sources, only two companies from the Gulf countries received documents for investment by depositing $5,000.

These two firms have not even submitted their applications for tenders yet.

The last date for the submission of requests for tenders related to the privatisation of the PIA is May 3.

The date for the submission of applications for the PIA stake tenders is likely to be extended by a month, according to sources within the Privatisation Commission.

Privatization officials, including the PIA&rsquo;s financial adviser on the national carrier for this process, are unfamiliar with bringing in investment from abroad.

The lack of enthusiasm of the foreign investors in the PIA&rsquo;s privatization is a matter of regret as the Pakistani authorities have not even received their messages about the process yet.

The Privatisation Commission and the PIA administration also conducted various roadshows advertising the national carrier&rsquo;s sell-off but failed to achieve much success.

In March this year, the board of directors of the PIA approved the government&rsquo;s plan to privatize the national flag carrier ahead of the country securing a new International Monetary Fund (IMF) loan programme, estimating to fetch $250-300 million through the sell-off likely to a Middle Eastern country.

Last month, Pakistan placed on the block a stake ranging from 51% to 100% of the loss-making PIA, opening a new tab as part of reforms recommended by the IMF.

In a newspaper advertisement, the privatization panel set a deadline of May 3 to receive statements of interest in the PIA, which has piled up arrears of hundreds of billions of rupees, and it appointed EY Consulting as the financial adviser for the deal.

&quot;The restructured PIA is being offered to potential investors in its &#39;debt-lite&#39; new structure for a 51%-plus stake,&quot; the Privatisation Commission wrote in a website presentation.

The panel aimed to sign a share price deal by June 24, after completing all steps in the transaction.

&quot;The restructured PIA provides an opportunity to invest in a full-service airline.&quot;

The PIA&#39;s 23% share of Pakistan&#39;s aviation market is the biggest, and the airline could grow further to exceed historic levels of 30%, the panel said.

With a fleet of 34 aircraft comprising 17 Airbus A320s, 12 Boeing B777s, and five ATRs, the airline loses traffic to Middle Eastern carriers, who have a market share of 60%, because of an absence of direct flights to destinations.]]>
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			<title>PIA seeks 30-day delay for annual general meeting</title>
			<link>https://tribune.com.pk/story/2464157/pia-seeks-30-day-delay-for-annual-general-meeting</link>
			<comments>https://tribune.com.pk/story/2464157/pia-seeks-30-day-delay-for-annual-general-meeting#comments</comments>
			<pubDate>Sat, 27 Apr 24 04:59:37 +0500</pubDate>
			<dc:creator>
				<![CDATA[Our Correspondent]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2464157</guid>
			<description>
				<![CDATA[A letter has been dispatched to the stock exchange, informing shareholders of the extension and the reasons behind it]]>
			</description>
			<content:encoded>
				<![CDATA[Pakistan International Airlines (PIA) has requested a 30-day extension for holding its annual general meeting (AGM).

The airline submitted an application to the Securities and Exchange Commission of Pakistan (SECP), citing incomplete financial accounts and audit as reasons for the delay.

The AGM is likely to take place by May 30 after the requested extension. Sources familiar with the matter revealed that the request for respite is also linked to ongoing privatisation issues facing PIA.

A letter has been dispatched to the stock exchange, informing shareholders of the extension and the reasons behind it.]]>
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			<title>PIA okays restructuring, investment</title>
			<link>https://tribune.com.pk/story/2463325/pia-okays-restructuring-investment</link>
			<comments>https://tribune.com.pk/story/2463325/pia-okays-restructuring-investment#comments</comments>
			<pubDate>Sat, 20 Apr 24 20:16:59 +0500</pubDate>
			<dc:creator>
				<![CDATA[Salman Siddiqui]]>
			</dc:creator>
			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2463325</guid>
			<description>
				<![CDATA[Operational profits, European flight resumption mark pivot towards privatisation]]>
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				<![CDATA[Pakistan International Airlines&rsquo; (PIA) shareholders have given approval for the airline&rsquo;s restructuring, likely to occur by July-August 2024. This move anticipates encountering no political resistance to the sell-off of core operations, potentially to foreign investors due to the need for foreign exchange, as recommended by the International Monetary Fund (IMF).

During an Extraordinary General Meeting (EOGM) held on Saturday, the national flag carrier&rsquo;s management reported achieving an &lsquo;operating profit&rsquo; for the first time in 13 years. The management projected the resumption of flights on two major European routes, including Paris, and to a UK city by June, aiming to increase earnings from these profitable routes.

A PIA spokesperson informed The Express Tribune that the airline conducted a poll to seek consent from shareholders to transform PIA Corporation Limited into PIA Holding Limited by bifurcating it into two segments: Corporate Undertaking and Non-Core Undertaking. &ldquo;The shareholders overwhelmingly voted in favour of (creating) PIA Holding Company.&rdquo;

In their address to shareholders, the PIA chairman and CEO underscored the government&rsquo;s implementation of tough measures for the airline&rsquo;s improvement. The high-level participation of government officials in the meeting demonstrates the government&rsquo;s seriousness and commitment to rectifying the loss-making entity.

Prominent participants at the meeting included the federal secretary of the Privatisation Commission, secretary aviation, legal experts from the financial advisor, and PIA&rsquo;s board of directors.

They highlighted the national carrier&rsquo;s outperformance during the calendar year 2023, leading to reporting &lsquo;operating profit&rsquo; after 13 years. The airlines&rsquo; share price has significantly increased, &ldquo;raising its value by 700-fold.&rdquo; PIA plans to commence operations in Europe and the United Kingdom from June 2024 after clearing the European Union Aviation Safety Agency (EASA) audit.

JS Global, Head of Research, Amreen Soorani stated in a post-PIA EOGM commentary that the management briefed shareholders that the restructuring process is on track for completion by July-August 2024, barring unforeseen circumstances.

The company is confident that political resistance won&rsquo;t impede progress; &ldquo;relevant authorities are equipped to handle such situations,&rdquo; she added.

PIA privatisation is a core recommendation from the IMF, as the government negotiates to secure a new loan package from the leading global creditor. Pakistan has approached the IMF to initially secure a $6 billion Extended Fund Facility (EFF) for three years. Soorani mentioned that the resumption of flights on the two European routes is expected to recover significant revenue losses (around Rs70 billion annually). The addition of two new destinations (Paris and a UK city) will offer approximately 20-25 flights per week cumulatively. Separating PIA&rsquo;s debt has freed up operating cash for crucial investments in improving aviation infrastructure and services, said the analyst.

The Finance Division has approved PIA debt re-profiling with commercial banks at an estimated interest rate of 12%. The board informed that potential improvements in PIA Core&rsquo;s performance and dividends are expected to aid Holdco&rsquo;s debt repayment. Remaining modalities will be announced in due course. The government aims to sell a majority stake (51% or more) from its existing holding of 96% in the restructured PIA to a private investor. The company&rsquo;s response to the recent Expression of Interest (EoI) will be a key factor affecting the final timeline.

Earlier, the aviation ministry was quoted as reporting that seven international investors have expressed interest in acquiring Pakistan&rsquo;s national flag carrier and airports, which the country has put up for sale. Germany, France, the Netherlands, Qatar, the United Arab Emirates, Malaysia, and Turkiye, along with a local group, are among those expressing interest in purchasing the national assets.

However, a foreign media outlet recently reported that Pakistan&rsquo;s Privatisation Commission has formally invited EOI to sell 51-100% of the share capital and management control of Pakistan International Airlines. &ldquo;The government agency issued the invitation on April 2.&rdquo;

The EOI is open to companies, firms, body corporates, and other legal entities. However, it is not open to individuals or any entities owned or controlled by the Pakistani federal or provincial governments. Interested parties have until May 3, 2024, to submit their electronic EOI, along with a non-refundable processing fee of $5,000.

The outlet added that a previous report suggests Qatar, Saudi Arabia, and the United Arab Emirates are discussing with the government of Pakistan to buy stakes in PIA. Entities from other countries have also expressed some interest.

Published in The Express Tribune, April 21st, 2024.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.

&nbsp;]]>
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			<title>PIA operations to Dubai restored</title>
			<link>https://tribune.com.pk/story/2463300/pia-operations-to-dubai-restored</link>
			<comments>https://tribune.com.pk/story/2463300/pia-operations-to-dubai-restored#comments</comments>
			<pubDate>Sat, 20 Apr 24 18:19:37 +0500</pubDate>
			<dc:creator>
				<![CDATA[our.correspondent]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2463300</guid>
			<description>
				<![CDATA[Airline cancelled 31 flights to UAE in part four days due to torrential rains]]>
			</description>
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				<![CDATA[The Pakistan International Airlines&rsquo; (PIA) operations to Dubai and Sharjah on Saturday were restored after 31 flights had been cancelled to the United Arab Emirates (UAE) in the past four days because of the unprecedented torrential rains in the Gulf region.

Sources said eight PIA flights fly to Dubai on a daily basis.

However, they added that 21 flights to Dubai were cancelled in the past four days.

Heavy rains in the famous Gulf destination from April 16 severely affected the PIA&rsquo;s operations to the region.

In an open letter to customers from Emirates President Tim Clark, he wrote that the ongoing week had been one of the toughest for the airline operationally, as record storms hit the UAE.

&ldquo;I would like to offer our most sincere apologies to every customer who has had their travel plans disrupted during this time,&rdquo; he added.

Read also:&nbsp;Dubai airport diverts flights as &#39;exceptional weather&#39; hits Gulf

Clark noted that on April 16, the UAE experienced its highest rainfall in 75 years.

&ldquo;Lashing storm winds and rain disrupted activity across the cities. Our 24/7 hub in Dubai remained open, with flight movements reduced for safety, but flooded roads impeded the ability of our customers, pilots, cabin crew, and airport employees to reach the airport, and also the movement of essential supplies like meals and other flight amenities. We diverted dozens of flights to avoid the worst of the weather on Tuesday, and over the next three days we had to cancel nearly 400 flights and delay many more, as our hub operations remained challenged by staffing and supply shortages.&rdquo;

He noted that to free up resources and capacity to manage impacted customers as a priority, Emirates had to suspend check-in for passengers departing Dubai, implement an embargo on ticket sales, and temporarily halt connecting passenger traffic from points across our network coming into the city.

&ldquo;We deployed additional resources to aid our airport and contact centre teams with rebooking and put on additional flights to destinations where we identified large numbers of displaced customers. We sent over 100 employee volunteers to look after disrupted customers at Dubai Airport departures and in the transit area, prioritising medical cases, the elderly and other vulnerable travellers. To date, over 12,000 hotel rooms were secured to accommodate disrupted customers in Dubai, 250,000 meal vouchers have been issued, and more quantities of drinking water, blankets, and other amenities&rdquo;

The Emirates president further wrote that since Saturday, the airline&rsquo;s regular flight schedules had been restored

Read:&nbsp;PIA eyes profit with EU flights resumption

&ldquo;Passengers previously stranded in the airport transit area have been rebooked and are en route to their destinations. We have put together a task force to sort, reconcile, and deliver some 30,000 pieces of left-behind baggage to their owners.&rdquo;

Separately, the PIA has decided to make the French capital of Paris a hub for its European flight operations.

As the PIA is likely be given the nod to resume its flights to European destinations after four years, the national carrier has stepped up its plans for this purpose.

According to sources, the PIA management is confident that the European Air Safety Committee meeting on May 14 to 16 will allow the airline to resume its operations to Europe.

The resumption of the PIA flights to European countries will generate billions of rupees annually. The national carrier has lost Rs120 billion so far because of the ban on its flights to European countries imposed in July 2020.]]>
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			<title>PIA eyes profit with EU flights resumption</title>
			<link>https://tribune.com.pk/story/2463073/pia-eyes-profit-with-eu-flights-resumption</link>
			<comments>https://tribune.com.pk/story/2463073/pia-eyes-profit-with-eu-flights-resumption#comments</comments>
			<pubDate>Thu, 18 Apr 24 18:24:01 +0500</pubDate>
			<dc:creator>
				<![CDATA[Talib Fareedi]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2463073</guid>
			<description>
				<![CDATA[Holding company BOD review proposal for early retirement scheme]]>
			</description>
			<content:encoded>
				<![CDATA[In a pivotal session of the Pakistan International Airlines (PIA) holding company&#39;s board of directors, participants were briefed on the potential lifting of the ban on PIA flights to Europe next month, foreseeing substantial profits for the airline and aiding its privatisation. During the Thursday meeting, fresh insights into the reorganisation of PIA were unveiled, as per official sources.

The PIA works department apprised the board of assets worth billions of rupees across the United States, Paris, the Netherlands, and Pakistan. Discussions centred on the divestment of PIA&#39;s assets, encompassing aircraft and routes.

It was emphasised that investor interest in acquiring PIA would surge with the resumption of European flights, projecting annual revenues in billions of rupees from the anticipated reinstatement.

The European Union Aviation Safety Agency (EASA) had enforced a flight ban on the national carrier following a tragic plane crash in Karachi in May 2020, claiming 97 lives. The subsequent investigation revealed irregularities in the licensing process for commercial pilots.

Chaired by Tariq Bajwa, the holding company&#39;s meeting contemplated a proposal to facilitate the retirement of additional PIA employees through a voluntary retirement scheme.

Read also:&nbsp;&lsquo;Clandestine&rsquo; PIA sale irks Rabbani

On March 28, the newly constituted holding company, entrusted with PIA&#39;s privatisation, endorsed the restructuring of the airline&#39;s Rs268 billion commercial debt.

An official press release from the Special Investment Facilitation Council (SIFC) website disclosed that banks had agreed to extend the debt repayment period to ten years and cap interest rates at a maximum of 12%.

Should privatisation not materialise within three years, banks reserve the right to renegotiate terms, potentially reverting to original interest rates in 2027.

The government aims to submit a scheme of arrangement to the Securities and Exchange Commission of Pakistan (SECP) to finalise privatisation by June 11.

Bidding for PIA is imminent, with plans to bifurcate the airline into two entities, with the holding company absorbing bad debts exceeding Rs650 billion.

The government will undertake annual interest payments of Rs32 billion to banks, with debt settlement contingent upon privatisation proceeds or budget allocations.]]>
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			<title>PM Shehbaz meets Saudi FM, pitches multiple projects for investment</title>
			<link>https://tribune.com.pk/story/2462760/pm-shehbaz-meets-saudi-fm-pitches-multiple-projects-for-investment</link>
			<comments>https://tribune.com.pk/story/2462760/pm-shehbaz-meets-saudi-fm-pitches-multiple-projects-for-investment#comments</comments>
			<pubDate>Tue, 16 Apr 24 07:18:35 +0500</pubDate>
			<dc:creator>
				<![CDATA[Our Correspondent]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2462760</guid>
			<description>
				<![CDATA[Islamabad aims for KSA's investment in energy and infrastructure projects ventures]]>
			</description>
			<content:encoded>
				<![CDATA[A high-level delegation, led by Saudi Foreign Minister Faisal bin Farhan Al Saud, called on Prime Minister Shehbaz Sharif on Tuesday and deliberated upon various investment ventures including Pakistan International Airlines (PIA), said a statement by the Prime Minister&rsquo;s Office (PMO).

The Saudi delegation comprised Saudi Deputy Minister of Investments Engineer Ibrahim bin Yusuf Al Mubarak, Saudi Minister of Environment, Water Resources, and Agriculture Abdul Rahman bin Abdulhamsin Al-Fazli, and Saudi Minister of Industry and Mineral Resources Bandar bin Ibrahim bin Abdullah Al Kharif, along with other senior Saudi officials and diplomats.

&quot;Pakistan and Saudi Arabia have a long-standing brotherly relationship which is unprecedented,&quot; said the premier as he welcomed the delegation at the PM House.

Federal Ministers Ishaq Dar, Khawaja Asif, Mohsin Naqvi, Jam Kamal Khan, Rana Tanveer Hussain, Abdul Aleem Khan, Dr. Musadik Malik, Owais Khan Laghari, Deputy Chairman Planning Jahanzeb Khan, National Assembly Member Romina Khurshid Alam and other government officials were present during the meeting.



The premier conveyed that KSA has consistently provided support to Pakistan during difficult times and also expressed appreciation for the delegation&#39;s arrival shortly after Eidul Fitr.

&quot;Pakistan wants to further promote cooperation in the fields of trade and investment between the two countries,&quot; stated the prime minister according to the statement released by the PMO.

During the meeting, the government briefed the Saudi delegation about extensive investment opportunities available in the country and suggestions were exchanged - concerning investments in transmission lines, solar projects, and mining projects.

The delegation was also presented with proposals including the privatization of airports, joint ventures in two five-star hotels in Islamabad, and investment opportunities in PIA.

The offer of land by the Capital Development Authority (CDA) for the construction of hotels in partnership with Saudi Arabia was extended, added the statement.

&quot;Pakistan is taking steps to promote foreign investment and form mutually beneficial partnerships with brotherly countries.&quot;

&quot;The visit is the beginning of a new era of strategic and commercial partnership between Pakistan and Saudi Arabia,&quot; the PMO quoted PM Shehbaz.

Proposals included projects such as the Matiari Transmission Line and the establishment of a health city, with the CDA expressing readiness to collaborate or provide land for investment.

Expressing gratitude, the premier affirmed, &quot;Pakistan is grateful to the Saudi leadership for increasing investment on behalf of Saudi Arabia.&quot;



The KSA delegation expressed gratitude to the PM for extending a warm welcome and hospitality on behalf of Pakistan.

The Saudi foreign minister reaffirmed the kingdom&#39;s commitment to enhancing Pakistan-Saudi relations and advancing trade and investment partnerships.

Shehbaz also informed the delegation about the Special Investment Facilitation Council (SIFC) and its measures to promote investment in the country.

Read Saudis may invest $1b in Reko Diq

PM Shehbaz emphasized the crucial contribution of Chief of the Army Staff (COAS ) General Syed Asim Munir and institutional cooperation in promoting investment through SIFC.

The delegation, comprising key ministers and senior officials arrived in Pakistan on the heels of a visit by PM Shehbaz to Riyadh earlier this month where he held wide-ranging talks with the Saudi leadership.

Earlier this month, on April 8, the premier met with the crown prince and discussed bilateral relations matters of mutual interest at Makkah rendezvous, the counterparts discussed expediting a planned $5 billion investment package.

The visit is a follow-up to the premier&#39;s visit to the kingdom. The primary objective of his visit was to persuade the Saudi government to help Pakistan revitalise its economy through investments.

Pakistan attaches great significance to the visit as FM Dar himself welcomed the delegation at Noor Khan Air Base yesterday.

The visit is anticipated to provide a significant boost to bilateral cooperation and foster a mutually beneficial economic partnership between the two nations.

Pakistan is hoping to attract billions of dollars in investment from Saudi Arabia as part of its initiative under the banner of the SIFC.]]>
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			<title>‘Clandestine’ PIA sale irks Rabbani</title>
			<link>https://tribune.com.pk/story/2462740/clandestine-pia-sale-irks-rabbani</link>
			<comments>https://tribune.com.pk/story/2462740/clandestine-pia-sale-irks-rabbani#comments</comments>
			<pubDate>Tue, 16 Apr 24 05:09:35 +0500</pubDate>
			<dc:creator>
				<![CDATA[Our Correspondent]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2462740</guid>
			<description>
				<![CDATA[PPP senator opposes cabinet approving flag carrier’s sell-off]]>
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				<![CDATA[PPP Senator Mian Raza Rabbani on Monday opposed the privatisation of the Pakistan International Airline (PIA), saying being an strategic asset, its sale would compromise national defence.

In a statement, the senator also objected to the cabinet approving the sale despite the fact that &ldquo;PIA falls in the Federal Legislative List, Part II, of the Constitution; hence, under Article 154, its policy is governed by the Council of Common Interests (CCI). &rdquo;The policy approval of PIA&rsquo;s privatisation should have been taken from the CCI and not the cabinet which is unconstitutional.&rdquo;

He was of the opinion that in a state of emergency, PIA could be used for defence purposes. &ldquo;Being given in part or full in foreign hands will compromise national defence.&rdquo;

Rabbani took exception to the way the privatization process had been carried forward, saying &nbsp;the process of privatisation of PIA was confined to the ruling elite which was condemnable. &ldquo;The privatisation seems to be a clandestine operation where the details have not been shared with the elected labour union, the various professional associations or the common employee.&rdquo;

&ldquo;The details have been shared with the IMF, while even parliament is kept in the dark,&rdquo; he added.

He posed the following questions to the government; i) what is going to be the treatment of the various prime properties owned by PIA in different cities of Pakistan? ii) what is going to be the treatment of the various properties and hotels owned by PIA in foreign countries? iii) what is going to be the treatment in terms of the job security of the regular employees of PIA? iv) what is going to be the treatment with the cockpit crew? v) what is going to be the treatment with retired employees in terms of their pensions?
He asked the government to rethink the privatisation process and form a parliamentary committee to examine it and urged the PPP to give a clear line to its elected labour union in PIA.
&nbsp;]]>
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			<title>EASA to assess PIA flight safety in May</title>
			<link>https://tribune.com.pk/story/2462424/easa-to-assess-pia-flight-safety-in-may</link>
			<comments>https://tribune.com.pk/story/2462424/easa-to-assess-pia-flight-safety-in-may#comments</comments>
			<pubDate>Sat, 13 Apr 24 05:00:04 +0500</pubDate>
			<dc:creator>
				<![CDATA[Our Correspondent]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2462424</guid>
			<description>
				<![CDATA[Officials hope agency’s review will result in PIA-EU flight revival]]>
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				<![CDATA[A delegation led by Civil Aviation Authority (CAA) Director General Khaqan Murtaza is set to attend a crucial meeting of the European Union Aviation Safety Agency (EASA) scheduled for mid-May to review the revival of Pakistan International Airlines (PIA) flight operations in Europe.

During the meeting, the authority will scrutinize a report on the audit of various departments of the CAA in light of EASA standards. In November 2023, an EASA team visited Pakistan to assess various aspects of the CAA and PIA, including licensing, flight safety, flight standards, and airworthiness.

According to some officials, the CAA has fulfilled all the requirements of the agency, and EASA is likely to lift restrictions on Pakistan after the safety review board meeting. If this occurs, PIA flights to Europe and the UK will resume after a prolonged hiatus.

EASA had imposed a ban on the flight operations of the national flag carrier following a PIA plane crash in Karachi in May 2020. The crash, which claimed 97 lives, later uncovered a scandal regarding the issuance of licenses to commercial pilots without proper evaluation.]]>
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			<title>Rs30b net worth set for PIA buyers</title>
			<link>https://tribune.com.pk/story/2461445/rs30b-net-worth-set-for-pia-buyers</link>
			<comments>https://tribune.com.pk/story/2461445/rs30b-net-worth-set-for-pia-buyers#comments</comments>
			<pubDate>Tue, 02 Apr 24 21:19:07 +0500</pubDate>
			<dc:creator>
				<![CDATA[Shahbaz Rana]]>
			</dc:creator>
			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2461445</guid>
			<description>
				<![CDATA[May 3 deadline for submission of Statements of Qualification by investors]]>
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				<![CDATA[Pakistan, on Tuesday, approved the eligibility criteria for prospective buyers to acquire majority stakes in Pakistan International Airlines (PIA), setting a net worth requirement for the buyer at a minimum of Rs30 billion or $100 million.

The Privatisation Commission&rsquo;s board approved the prequalification criteria for potential bidders and also formed a prequalification committee. The board meeting was chaired by Privatisation Minister Abdul Aleem Khan.

The board convened on the same day the government invited bids for the sale of 51% to 100% stakes in PIA, with a deadline of May 3rd for the submission of Statements of Qualification by investors. The Privatisation Commission released the Expression of Interest to attract potential investors for divesting 51% to 100% shares and the draft Request for Statement of Qualification (RSOQ).

As per the financial criteria approved by the board, the bidder should have a minimum net worth of Rs30 billion or $100 million based on the latest financial accounts. In the case of a consortium bidding, the combined net worth of the consortium must be Rs30 billion, with the lead bidder having a net worth of not less than Rs8 billion or $25 million, according to the approved criteria.

This limit seems relatively low compared to the significant investment required for acquiring the national flag carrier and expanding its operations over the medium term.

According to another criterion, the bidding consortium must demonstrate that non-airline enterprises have a minimum aggregate annual revenue of Rs200 billion or $700 million. The government currently holds approximately 96% of the shares in the total issued capital of PIA.

The government aims to sell the country&rsquo;s third-highest loss-making entity by June this year. According to the Pakistan Civil Aviation Act and related regulations, a foreign-owned airline cannot acquire majority stakes in Pakistani airlines. Foreign investors would need to partner with local investors to place a bid.

As part of the privatisation process, the government has also submitted a segregation scheme and the Scheme of Arrangement to clean the airline from legacy loans before privatisation. The cabinet has already approved the establishment of a new PIA Holding Company, which will become the parent body of the current Pakistan International Airlines Company (PIACL).

Read&nbsp;Pakistan canvasses interest in purchase of stake in PIA

However, the Securities and Exchange Commission of Pakistan (SECP) has requested the PIA board to obtain approval from the Annual General Meeting for the segregation plan. As of the end of December, PIA had a negative equity of Rs660 billion, out of which Rs55.7 billion of negative equity will be transferred to prospective buyers. The remaining negative equity of Rs604 billion will be transferred to the new holding company.

PIA&rsquo;s total liabilities amounted to Rs830.8 billion, but Rs628.5 billion of liabilities will be transferred to the Holding Company. The airline&rsquo;s total assets are estimated at Rs171.4 billion, with Rs25 billion to be retained in the holding company. According to the advertisement, PIA has access to 97 international routes with slots in some of the most attractive international destinations, providing direct flight access to passengers traveling between Pakistan and the large diaspora target markets.

These routes are highly valuable. In the last board meeting, members inquired about the valuation of the international routes, but the financial advisor did not share the details, according to sources.

PIACL will retain core assets, core liabilities, employees related to air transport operations and allied services, rights and obligations under various operational agreements executed by PIACL, including air service agreements, code sharing agreements, fuel supply agreements, passenger sale agency agreements, and foreign loan agreements.

After SECP approval, the existing shareholders of PIACL will become shareholders of PIA Holding Company, and PIACL will become a wholly-owned subsidiary of the PIA Holding Company. The PIA Holding Company will be listed on the stock exchange, and PIACL will be delisted.

There are 16,000 pensioners of PIA, and their liabilities will be transferred to the new Holding Company, with an estimated annual cost of Rs1.9 billion. Additionally, there are 10,857 employees of PIACL, with another 3,021 on the payroll of Sky Rooms Limited. The liabilities of the employees retained in PIA will be borne by the new investors.

There are 11 sales offices, and 14 prime locations are designated as non-core assets and are being transferred to the holding company.The government has also decided to reconstitute the PIA transaction committee and will appoint Abdul Haseeb Khan as legal advisor and Kamran Farooq Ansari as the Director-General of the Privatisation Commission.

Published in The Express Tribune, April 3rd, 2024.

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&nbsp;]]>
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			<title>PIA to sell aircraft spare parts ahead of privatisation</title>
			<link>https://tribune.com.pk/story/2461074/pia-to-sell-aircraft-spare-parts-ahead-of-privatisation</link>
			<comments>https://tribune.com.pk/story/2461074/pia-to-sell-aircraft-spare-parts-ahead-of-privatisation#comments</comments>
			<pubDate>Sat, 30 Mar 24 17:40:13 +0500</pubDate>
			<dc:creator>
				<![CDATA[our.correspondent]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2461074</guid>
			<description>
				<![CDATA[Management will invite bids for sale of spare parts of ageing aircraft on an 'as-is-where-is' basis]]>
			</description>
			<content:encoded>
				<![CDATA[In a significant move ahead of the privatisation of Pakistan International Airlines (PIA), the airline&#39;s management has announced the sale of additional spare parts for various categories of aircraft, valued at millions of rupees.

The management, focusing on streamlining resources, has decided to put spare parts of Boeing 737, Boeing 707, Fokker, and Cessna aircraft up for sale, issuing a tender for interested parties.

Sources reveal that these spare parts have been stocked in PIA&#39;s inventory for several years. The management has opted to invite bids for the sale of spare parts of these ageing aircraft on an &quot;as-is-where-is&quot; basis.

Interested parties are urged to submit their applications to participate in the tender process, with the deadline set for April 29, as confirmed by the PIA administration.

Meanwhile, an extraordinary annual general meeting of the national airline, PIA, has been scheduled for April 20 to address the matter of privatisation.

All shareholders of the airline have been cordially invited by the PIA management to participate in the meeting. The shareholders will be briefed on crucial matters, with a particular focus on the privatisation of PIA.

Read also:&nbsp;PIA Holding Company approves Rs268b debt restructuring

During the meeting, detailed discussions will take place regarding the various measures involved in the privatisation process.

The development comes as the government, in collaboration with domestic banks and development finance institutions (DFIs), has successfully concluded negotiations regarding PIA&rsquo;s commercial debt, marking a significant milestone in the path towards the privatisation of the national flag carrier.

Under the agreed arrangement, Pakistan International Airlines Company Ltd&rsquo;s (PIACL) commercial domestic debt will be transferred to PIA Holding Company Ltd, a newly established entity by the federal government as part of PIACL&#39;s legal restructuring process.

As per a statement released by PIACL on Friday, the development cleared the path for the filing of a scheme of arrangement (SoA) for the legal separation of PIACL from the Securities and Exchange Commission of Pakistan (SECP).

The federal cabinet had previously approved the segregation plan on Feb 6 earlier this year, signalling a crucial step forward in the ongoing restructuring efforts.]]>
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			<title>PIA Holding Company approves Rs268b debt restructuring</title>
			<link>https://tribune.com.pk/story/2460773/pia-holding-company-approves-rs268b-debt-restructuring</link>
			<comments>https://tribune.com.pk/story/2460773/pia-holding-company-approves-rs268b-debt-restructuring#comments</comments>
			<pubDate>Wed, 27 Mar 24 20:56:57 +0500</pubDate>
			<dc:creator>
				<![CDATA[Shahbaz Rana]]>
			</dc:creator>
			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2460773</guid>
			<description>
				<![CDATA[Govt aims to privatise airline by June 11th, with bids invited as early as next week]]>
			</description>
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				<![CDATA[The Pakistan International Airline Holding Company board on Wednesday approved the restructuring of the airline&rsquo;s Rs268 billion commercial debt, incorporating it into the public debt. The term sheet was finalised by the Ministry of Finance with commercial banks. The government&rsquo;s decision to merge the airline&rsquo;s debt into public debt means that taxpayers will bear the cost of PIA&rsquo;s inefficiency and mismanagement.

In its hastily convened inaugural meeting, the newly constituted PIA holding company board swiftly approved the term sheet for restructuring the Rs268 billion debt. Former Special Assistant to the Prime Minister, Tariq Bajwa, chaired the board meeting. The meeting was convened urgently, and directors attended virtually without adequate time to review the terms in detail.

According to the approved term sheet, banks have agreed to extend their debt for ten years and reduce interest rates from the existing approximately 23.5% to a maximum of 12%. If the government fails to privatise PIA within three years, banks will have the right to reopen the deal and demand an interest rate equal to prevailing rates in 2027.

Following board approval, the government will file the scheme of arrangement with the Securities and Exchange Commission of Pakistan (SECP). The government aims to privatise PIA by June 11th, with bids possibly invited as early as next week.

Essentially, PIA Company will split into two, with the airline&rsquo;s bad debts, including commercial loans, trade debts, and government borrowings, transferred to the holding company. Over Rs650 billion of the Rs825 billion PIA debt will be transferred to the holding company, leaving a clean PIA to be sold to investors.

The decision to include the airline&rsquo;s debt in the public debt and allocate annual interest payments from the budget shifts the responsibility for PIA&rsquo;s inefficiency to taxpayers. The government will make annual interest payments of Rs32 billion to banks, with the debt in the holding company either settled from privatisation proceeds or paid from the budget.

Read PIA sell-off, IMF loan send PSX to new high

The holding company&rsquo;s mandate is limited to discharging PIA&rsquo;s liabilities and does not include raising fresh loans. Commercial banks have priority rights over the holding company&rsquo;s assets.

Under the decision, the Rs268 billion debt, including Rs18 billion interest, has been rescheduled, now the responsibility of the federal government. The deal&rsquo;s cut-off date is the end of December 2023.

This arrangement means banks will receive over Rs300 billion in interest payments over a decade, exceeding their outstanding stocks of Rs268 billion. Sources indicate the total pay-out to banks at a 12% interest rate will be Rs573 billion over ten years.

However, the government has provided special treatment for the foreign currency loan of $88 million obtained from the National Bank of Pakistan (NBP) and Habib Bank Limited (HBL). This decision imposes an additional burden on the exchequer due to high interest rates in dollar terms and exchange rate risks over the next five years.

Unlike the restructuring of domestic lending from commercial banks amounting to Rs243 billion, the finance ministry did not convert the $88 million or Rs25 billion foreign loan component into domestic currency.

A consortium of NBP and HBL provided a $88 million loan to PIA at the Secured Overnight Financing Rate (SOFR) plus 5.4%, approximately 11% in dollar terms.

It has been decided that a portion of the $88 million will be settled, with $53 million transferred to the holding company without restructuring. NBP and HBL will provide equivalent rupee funding to the New Hold Company. The $53 million will be transferred to the books of the New Hold Company and repaid over five years at the existing interest rate of SOFR+ 5.4% per annum, equivalent to 11% in dollar terms.

Banks will have sovereign guarantees and exclusive rights to all present and future current and fixed assets of New Hold Company, excluding any interest or charge on Roosevelt Hotel.

However, if the government fails to privatise PIA within three years, commercial banks will have the right to reopen the deal and demand an interest rate equal to prevailing government borrowing rates.

Lenders will also have the right to reject future borrowing by the holding company.

Excluding the foreign currency component, HBL&rsquo;s nearly Rs31 billion debt, NBP&rsquo;s Rs48 billion, Bank of Punjab&rsquo;s Rs59 billion, Askari Bank&rsquo;s Rs34.5 billion, Faysal Bank&rsquo;s Rs22.5 billion, JS Bank&rsquo;s Rs22 billion, and Al Baraka Bank&rsquo;s Rs7 billion debt have been rescheduled.

Published in The Express Tribune, March 28th, 2024.

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&nbsp;]]>
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			<title>PIA sell-off, IMF loan send PSX to new high</title>
			<link>https://tribune.com.pk/story/2460770/pia-sell-off-imf-loan-send-psx-to-new-high</link>
			<comments>https://tribune.com.pk/story/2460770/pia-sell-off-imf-loan-send-psx-to-new-high#comments</comments>
			<pubDate>Wed, 27 Mar 24 20:56:55 +0500</pubDate>
			<dc:creator>
				<![CDATA[Our Correspondent]]>
			</dc:creator>
			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2460770</guid>
			<description>
				<![CDATA[KSE-100 index surges 641.51 points, settles at 66,547.79]]>
			</description>
			<content:encoded>
				<![CDATA[Pakistan Stock Exchange (PSX) on Wednesday soared to a record high as it crossed the 66,500 milestone over progress in the privatisation process for state-owned Pakistan International Airlines (PIA) and optimism about a new, larger International Monetary Fund (IMF) loan programme.

As trading commenced in the morning, the bourse continued its upward march with investors pushing the KSE-100 index above the resistance level of 66,000, which the market had failed to breach in the past many days.

The index got a boost from the PIA board of directors&rsquo; approval of the government&rsquo;s plan to privatise the national flag carrier, ahead of securing the new IMF loan programme.

Prime Minister Shehbaz Sharif&rsquo;s statement that an agreement on the second phase of China-Pakistan Economic Corridor (CPEC) was expected to be signed with Beijing soon rejuvenated investor confidence. Major contribution to the bullish momentum came from banking and fertiliser sectors.

The upward momentum was further aided by the rupee&rsquo;s continuous stability, which took the KSE-100 to the intra-day high of 66,607.87. The index after shedding some points in the final hour closed above the 66,500 level.

&ldquo;Stocks closed at a record high as government deliberated the PIA privatisation process and global investors&rsquo; interest in the ailing SOE (state-owned enterprise),&rdquo; said Ahsan Mehanti, MD of Arif Habib Corp.

Read&nbsp;PSX extends gains, nears 66,000 mark

&ldquo;Rupee stability, PM&rsquo;s commitment to the second phase of CPEC and foreign fund inflows played the role of catalysts in bullish close at the PSX.&rdquo; At close, the benchmark KSE-100 index recorded a surge of 641.51 points, or 0.97%, and settled at 66,547.79.

Topline Securities&rsquo; Deputy Head of Sales Ali Najib reported that finally the index broke the 66,000 barrier, which could be attributed to &ldquo;positive vibes from the IMF, rejuvenated foreign interest at historically low valuations and progress on SOE privatisation&rdquo;.

Investors chose to further strengthen their equity positions by buying blue-chip stocks across the board, he said. Resultantly, power, banking and fertiliser sectors contributed positively to the index as Hub Power, Meezan Bank, United Bank, MCB Bank and Engro Corporation added a total of 319 points.

On the flip side, Pakistan Petroleum, the National Bank of Pakistan and Millat Tractors saw some profit-taking as they cumulatively lost 67 points, he added.

Arif Habib Limited (AHL), in its review, wrote that the 66,000 resistance level was finally breached and it should now support the ascent to new all-time highs.

According to Finance Minister Muhammad Aurangzeb, Pakistan will be looking to conclude an IMF agreement for a new loan programme by the end of June or early July, it said.

AHL added that investors would be focusing on the FTSE equity country classification review after the close of US markets on Thursday, where Pakistan was on the watch list for potential demotion from secondary emerging to frontier market status.

JS Global analyst Mubashir Anis Naviwala observed that the bourse made a significant breakthrough as the KSE-100 index surpassed the resistance level of 66,200.

Considerable investor interest was seen in banking and fertiliser sectors, he said. &ldquo;Looking ahead, we suggest investors to consider a buy-on-dips strategy, particularly focusing on banking, E&amp;P and technology sectors,&rdquo; the analyst added.

Overall trading volumes increased to 354.6 million shares against Tuesday&rsquo;s tally of 303.7 million. The value of shares traded during the day was Rs11.9 billion.

Shares of 346 companies were traded. Of these, 179 stocks closed higher, 152 dropped and 15 remained unchanged.

Lotte Chemical was the volume leader with trading in 42.8 million shares, gaining Rs0.55 to close at Rs19.53. It was followed by Telecard Limited with 29.2 million shares, gaining Rs0.75 to close at Rs9.24 and PTCL with 24.7 million shares, gaining Rs1.21 to close at Rs17.31. Foreign investors were net buyers of shares worth Rs94.3 million, according to the NCCPL.

Published in The Express Tribune, March 28th, 2024.

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&nbsp;]]>
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			<title>PIA board approves privatisation plan amid IMF talks</title>
			<link>https://tribune.com.pk/story/2460634/pia-board-approves-privatisation-plan-amid-imf-talks</link>
			<comments>https://tribune.com.pk/story/2460634/pia-board-approves-privatisation-plan-amid-imf-talks#comments</comments>
			<pubDate>Tue, 26 Mar 24 21:04:47 +0500</pubDate>
			<dc:creator>
				<![CDATA[Salman Siddiqui]]>
			</dc:creator>
			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2460634</guid>
			<description>
				<![CDATA[Commits to govt target of June 2024 for sell-off, aims to fetch $250-300m]]>
			</description>
			<content:encoded>
				<![CDATA[The board of directors of Pakistan International Airlines (PIA) has approved the government&rsquo;s plan to privatise the national flag carrier ahead of the country securing a new International Monetary Fund (IMF) loan programme, estimating to fetch $250-300 million through the sell-off likely to a Middle Eastern country.

Following its reconstitution on Friday, March 22, the board of directors convened its first meeting on Monday and committed to the government&rsquo;s timeline to privatise PIA by June 15, 2024.

Some meeting participants expressed confidence that PIA&rsquo;s sell-off would occur before the country secures the next IMF loan package. Finance Minister Muhammad Aurangzeb is expected to formally approach the IMF for a new loan programme at the Fund&rsquo;s annual meeting in mid-April 2024.

However, a source dispelled the impression that PIA privatisation is a prerequisite condition for the IMF&rsquo;s next loan programme.

The PIA board formally approved the appointment of international financial advisor, Ernst &amp; Young, for the privatisation transaction.

According to a source familiar with the developments surrounding the airline&rsquo;s sell-off, the advisor&rsquo;s briefing to the board projected that PIA&rsquo;s privatisation may fetch $250-300 million for the government.

However, the actual value of PIA may differ once interested buyers conduct due diligence of the national carrier.

Read&nbsp;EASA clearance to sweeten PIA sell-off

Progress on the airline&rsquo;s privatisation front suggests that potential buyers for the national carrier have already expressed their intention to purchase it. They may belong to a Middle Eastern country such as the United Arab Emirate (UAE) or Qatar, the source opined.

In a notification to the Pakistan Stock Exchange (PSX) on Tuesday, PIA Company Secretary Rao Muhammad Imran stated, &ldquo;the board of directors of the company in its 83rd meeting held on March 25, 2024 (Monday) has approved the Scheme of Arrangement (SOA) for restructuring and privatisation of Pakistan International Airlines Corporation Limited along with its ancillary modalities, to be filed with the Securities and Exchange Commission of Pakistan (SECP).&rdquo;

The source noted that this was the first meeting of the PIA board following its reconstitution. The newly appointed board endorsed the government&rsquo;s decisions on the PIA sell-off, as PIA board approval is necessary to proceed with the Privatisation Commission&rsquo;s plan in line with governing laws.

He said, the board approved all the 30 to 40 steps and procedures related to PIA sell-off. Some, such as the appointment of the international financial advisor Ernst &amp; Young, had already taken place before the board&rsquo;s reconstitution.

However, selling PIA in a government-to-government or government-to-private sector deal is not as straightforward as projected, said the source. The airline may find a new owner (for 51% stake with management control) by the given deadline (June 15, 2024) only if all procedures are introduced on time and proceed smoothly.

Successfully culminating the privatisation process entails a lot of work, including PIA restructuring, which involves bifurcating the company into two parts. One would hold the core operations of the airline up for sale, while a holding company would manage the debt and liabilities of the airline, including a domestic commercial loan of Rs243 billion and a foreign loan of $88 million.

Speaking to The Express Tribune, PIA Spokesperson Abdullah Hafeez Khan stated that the board meeting lasted about two-and-a-half to three hours.

He contradicted reports that the board of directors discussed an early retirement plan, Voluntary Separation Scheme (VSS), or golden handshake.

He affirmed that the board has committed to implementing the government&rsquo;s privatisation plan in full compliance and would play its role in achieving the airline&rsquo;s privatisation on time. PIA has been in the headlines regarding its privatisation for over a decade. Some quarters and political parties in parliament, however, do not find it fitting to sell the loss-making national carrier to a new owner.

The IMF has urged different governments to sell their loss-making assets to halt injecting around half a trillion rupees into them each year with no benefit. The resources spent on them could be diverted to productive projects.

Meanwhile, the federal government is set to provide preferential treatment to two domestic banks and is willing to take responsibility for their $88 million foreign currency lending to PIA without any restructuring.

The handling of the foreign currency loan contrasts with the restructuring of PIA&rsquo;s Rs243 billion domestic debt, which is being extended for 10 years at reduced interest rates.

Government sources informed The Express Tribune that this decision will impose an additional burden on the exchequer in the shape of high interest rates in dollar terms and exchange rate risks over the next five years.

Out of the $88 million, NBP lent $74 million, and HBL&rsquo;s share was $14 million. The government is considering partially settling the $88 million, with the remaining $53 million to be managed by the government holding company.

Published in The Express Tribune, March 27th, 2024.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation]]>
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			<title>Banks to get preferential treatment</title>
			<link>https://tribune.com.pk/story/2460512/banks-to-get-preferential-treatment</link>
			<comments>https://tribune.com.pk/story/2460512/banks-to-get-preferential-treatment#comments</comments>
			<pubDate>Mon, 25 Mar 24 21:25:05 +0500</pubDate>
			<dc:creator>
				<![CDATA[Shahbaz Rana]]>
			</dc:creator>
			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2460512</guid>
			<description>
				<![CDATA[Govt mulls settling high interest on $88m PIA loan without restructuring]]>
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				<![CDATA[The federal government is set to provide preferential treatment to two domestic banks and is willing to take responsibility for their $88 million foreign currency lending to Pakistan International Airlines (PIA) without any restructuring.

The handling of the foreign currency loan contrasts with the restructuring of PIA&rsquo;s Rs243 billion domestic debt, which is being extended for 10 years at reduced interest rates.

Government sources informed The Express Tribune that this decision will impose an additional burden on the exchequer in the shape of high interest rates in dollar terms and exchange rate risks over the next five years.

Unlike the commercial banks&rsquo; domestic lending of Rs243 billion being restructures, the finance ministry has declined advice to convert the $88 million or Rs25 billion foreign loan component into domestic currency, said sources. The government has decided to take over the responsibility of the Rs268 billion commercial banks&rsquo; debt to PIA, including the Rs25 billion or $88 million foreign currency loan. A consortium of the National Bank of Pakistan (NBP) and Habib Bank Limited (HBL) provided a $88 million loan to PIA at the Secured Overnight Financing Rate (SOFR) plus 5.4%, equivalent to around 11% in dollar terms.

Out of the $88 million, NBP lent $74 million, and HBL&rsquo;s share was $14 million. The government is considering partially settling the $88 million, with the remaining $53 million to be managed by the government holding company. The Ministry of Finance will then handle the principal and interest payments on the foreign loan, assuming the risks of high interest rates and currency devaluation, said the sources. Despite proposals to reduce the interest rate to 6% in dollar terms and convert the foreign currency loan into domestic financing to save additional interest expenses and avoid exchange rate risks, the Ministry of Finance has not endorsed these suggestions.

Read&nbsp;Apparel industry denounces banks

Sources mentioned that the Ministry of Finance is unwilling to reschedule the terms of this financing, unlike the treatment given to the Rs243 billion domestic lending by various banks.

The foreign loan facility will be settled in five years instead of 10, with the government paying an interest rate equal to SOFR plus 5.4%, close to 11% in dollar terms.

When contacted, Ministry of Finance Spokesperson, Qamar Abbasi stated, &ldquo;The proposed transfer of the $88 million foreign currency loan is intended to be recorded on the books of Hold Co, similar to the rest of PIA&rsquo;s commercial debt.&rdquo; Abbasi mentioned that discussions regarding the terms of transfer are ongoing with the banks.

&ldquo;Various proposals are being considered, including converting the loan from foreign currency to PKR, retaining it in its current form, or a combination of both,&rdquo; Abbasi explained. He further added that the final decision will be made after considering the requirements of the domestic foreign exchange market and determining the appropriate level of foreign exchange risk to be assumed by Hold Co.

The government and commercial banks have already agreed on a Rs268 billion debt restructuring plan. Sources said that the new term sheet is expected to be signed by the government and banks within the week, paving the way for the issuance of No Objection Certificates by the banks to divide PIA into two and transfer its approximately Rs610 billion debt to a new holding company.

After obtaining the NOC, PIA will file a scheme of arrangement with the Securities and Exchange Commission of Pakistan (SECP) to establish the new holding company. This move will shift the burden of PIA&rsquo;s inefficiency onto taxpayers but will remove an obstacle to its privatisation.

Under the new term sheet, the government will use proceeds from the PIA sale for principal payments, resorting to the budget if funds are insufficient. In return, banks will accept a 10-year debt rollover with a 12% annual interest rate, resulting in Rs32 billion in annual interest payments from 2024-25 onwards.

This arrangement means banks will receive over Rs300 billion in interest payments over a decade, exceeding their outstanding stocks of Rs268 billion. The total pay-out to banks at a 12% interest rate will be Rs573 billion over 10 years, said the sources.

Principal payments will be made from privatisation proceeds and the sale of other fixed assets. If, however, no proceeds are available, the finance ministry will settle the payments from the budget. The total outstanding debt of the airline is Rs825 billion, and the privatisation ministry and PIA will need no objection certificates from the CAA and FBR to file a scheme of arrangement with the SECP.

The Privatisation Commission board approved the transaction structure to sell a minimum of 51% stake after cleansing its balance sheet by transferring almost three-fourths of the Rs825 billion to a new company.

The government has informed the IMF of its plans to sell PIA by June this year.

Sources said that any decision to accept the $88 million loan in foreign currency will have significant budgetary implications, as the rupee-dollar parity is expected to fluctuate over the next five years.

Published in The Express Tribune, March 26th, 2024.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.

&nbsp;]]>
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			<title>PIA plane grounded in Istanbul after technical fault</title>
			<link>https://tribune.com.pk/story/2460013/pia-plane-grounded-in-istanbul-after-technical-fault</link>
			<comments>https://tribune.com.pk/story/2460013/pia-plane-grounded-in-istanbul-after-technical-fault#comments</comments>
			<pubDate>Thu, 21 Mar 24 05:07:51 +0500</pubDate>
			<dc:creator>
				<![CDATA[Our Correspondent]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2460013</guid>
			<description>
				<![CDATA[Boeing 777 scheduled to arrive from Turkiye malfunctioned on taxiway before taking off]]>
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				<![CDATA[A Pakistan International Airlines (PIA) flight returning from Turkiye on Wednesday was temporarily grounded in Istanbul because of a technical fault in its landing gear.

According to sources, the landing gear of PIA&rsquo;s Boeing 777 scheduled to arrive from Turkiye to Pakistan suddenly malfunctioned on the taxiway before taking off.

The captain of flight PK-704 diverted the aircraft back to the boarding bridge as per the standard operating formulated for this situation.

Later, the passengers were offloaded and shifted to the airport&rsquo;s lounge.

A team of engineers left from Karachi to Istanbul with spare parts for repair work.

The passengers have been sent to Pakistan by a Turkish Airlines flight.

Arrangements are under way to bring some stranded passengers to Islamabad through an alternative flight.

On Monday, another PIA&rsquo;s Boeing 777, which made an emergency landing at Muscat International Airport, returned to the country after the replacement of its engine.

The replaced engine -- removed from another Boeing 777 plane grounded at Jinnah International Airport -- was airlifted to Muscat on March 10 on a C-130 cargo plane.

Carrying 392 passengers, flight PK-714 from Madina to Islamabad had to make an emergency landing at Muscat airport after one of its engines suddenly failed at an altitude of 35,000 feet.

In the past 23 years, the PIA posted some profits only since 2002 till 2004 and that too by virtue of a bailout package of Rs20 billion. However, the abnormal oil price hike over the subsequent few years in conjunction with an extended EU ban due to safety concerns, on most of its planes for flying to Europe in 2007, caused a major dent upon its profitability.

By 2012, primarily driven by an aging fleet, the PIA&rsquo;s annual spend on fuel had increased to 54% of the total vis-a-vis 24% in 2003. Continuing the trend by 2017, its accumulated losses had risen to Rs356 billion.

Later, in lieu of the fake degrees&rsquo; scandal and associated safety concerns, the PIA was debarred from the EU, UK, USA and Canada in 2020, further affecting its revenues.]]>
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			<title>PIA privatisation, FBR restructuring greenlit</title>
			<link>https://tribune.com.pk/story/2458624/pia-privatisation-fbr-restructuring-greenlit</link>
			<comments>https://tribune.com.pk/story/2458624/pia-privatisation-fbr-restructuring-greenlit#comments</comments>
			<pubDate>Thu, 07 Mar 24 05:15:33 +0500</pubDate>
			<dc:creator>
				<![CDATA[Shahbaz Rana]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2458624</guid>
			<description>
				<![CDATA[Sources said the privatisation secretary briefed the premier on the possibility of privatising PIA by June 15]]>
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				<![CDATA[Prime Minister Shehbaz Sharif on Wednesday approved the privatisation of Pakistan International Airlines (PIA) before June 15 and also endorsed the restructuring plan of the Federal Board of Revenue (FBR), which had been cleared by the caretakers.

The PML-N&rsquo;s government on Wednesday carried forward the leftover work of the Special Investment Facilitation Council (SIFC) and the interim setup, marking the continuation of the previous setup&rsquo;s policies.

Former Finance Minister Ishaq Dar finally joined the PM&rsquo;s meetings on economic issues after initially avoiding them. Muhammad Aurangzeb, who is being tipped as the Special Assistant to the Prime Minister (SAPM) on Finance, also attended the meeting.

Sources said the privatisation secretary briefed the premier on the possibility of privatising PIA by June 15. However, the deadline was subject to the timely implementation of the scheme of arrangement to divide the national flag carrier into two entities and park Rs622 billion debt in the new holding company.

The scheme of arrangement cannot be implemented until the PIA&rsquo;s creditors give the no-objection-certificates, the PM was informed.

Sources said the prime minister instructed the privatisation secretary to further shorten the period required to sell off the entity.

In 2022, PIA stood as Pakistan&rsquo;s third-highest public sector loss-making entity, requiring Rs11.5 billion per month solely for servicing its debts.

In a significant development, the prime minister also endorsed the FBR&rsquo;s restructuring plan, which had previously received approval from the caretaker government but faced halts in its implementation by the court and the Election Commission of Pakistan (ECP).

The approved restructuring was contrary to the manifesto of the PML-N that had promised to separate the customs department from the FBR and place it under a &lsquo;to-be-created&rsquo; economy ministry.

A day earlier, the premier had directed the hiring of foreign consultants to modernise and digitise the FBR. It was decided on Wednesday that the foreign consultants would work on the entity&rsquo;s digitisation drive. The prime minister expressed dissatisfaction with the proposal to involve the National Database Registration Authority (Nadra) in the digitisation exercise.

According to the approved plan, the FBR will cease to exist and two new organisations &ndash; the Federal Customs Board and Federal Inland Revenue (IR) Board &ndash; will be created. In addition, the newly formed bodies will be placed under the Revenue Division.

Former finance minister Dr Shamshad Akhtar had initiated the FBR restructuring exercise. The scope of restructuring was wide-ranging. Its implementation will require amendments to various tax statutes and related laws, enactment of legislation for the two new organisations, and changes in the respective rules as well as the Rules of Business 1973.

Changes would be required in connection with the budget and expenditure allocations for the two organisations, establishment of new administrations, and division of the existing assets between them.

The customs and Inland Revenue organisations will be separated, with each headed by a director general (DG) to be appointed by the federal government from their respective service cadres for a fixed tenure. The two establishments will be the attached departments of the Revenue Division.

The DGs will have administrative, financial and operational autonomy including budgeting as well as posting and transfers for their respective establishments.

All matters related to international taxes; valuation of goods and assets; IT and digitisation, policies in connection with the data exchange between the two DGs, and human resource will also be placed in Revenue Division. Decisions will be made jointly based on consultations with both the DGs.

The determination of value for imported goods through valuation rulings will be carried out by a committee comprising equal representation from customs and IR and placed before the Revenue Division.

Former finance minister Ishaq Dar did not object to the FBR restructuring plan. Aurangzeb commented in the meeting that he was satisfied with the design aspect of the restructuring plan. The prime minister asked to finalise a timeline to implement the restructuring of the organization.

The premier instructed that if necessary, any procurement-related matters should be brought to the SIFC for fast-track implementation of the restructuring. The SIFC has the authority to grant waivers against any rule or law.

Dr Shamshad also attended the meeting. She informed the prime minster that the FBR was losing Rs3.5 trillion in revenue annually, with the majority stemming from sales tax and the income tax.

Additionally, the revenue losses from custom duties amounted to Rs600 billion.Dr Shamshad further stated that about 56 per cent income tax return filers were not paying any income tax, adding that only 200,000 taxpayers were bearing the burden of the 90 per cent tax payment.

The FBR&rsquo;s tax to GDP ratio was 8.5 per cent, which Dr Shamshad said could reach to 10.8 per cent in the next fiscal year with the implementation of the restructuring plan.

Her assertion was that by improving the compliance alone, the FBR&rsquo;s revenues could be enhanced by Rs1.7 trillion in the next fiscal year.]]>
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			<title>2nd plane secured from Jakarta joins PIA fleet</title>
			<link>https://tribune.com.pk/story/2458226/2nd-plane-secured-from-jakarta-joins-pia-fleet</link>
			<comments>https://tribune.com.pk/story/2458226/2nd-plane-secured-from-jakarta-joins-pia-fleet#comments</comments>
			<pubDate>Sun, 03 Mar 24 05:24:11 +0500</pubDate>
			<dc:creator>
				<![CDATA[Our Correspondent]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2458226</guid>
			<description>
				<![CDATA[Airbus 320 flies form Karachi to Lahore]]>
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				<![CDATA[&nbsp;

The second plane of the Pakistan International Airlines (PIA) brought back from the Indonesian capital city of Jakarta has also joined the air fleet as it flew from Karachi to Lahore on Saturday.

Since September 2021, PIA&rsquo;s two Airbus 320 were stuck in Jakarta because of a dispute with the leasing company.
The PIA administration had returned the two Airbus 320 aircraft leased in 2012 in September 2021. The national flag carrier had suffered a massive loss in payments made for the parking of the planes.

The PIA was spending around $600,000 monthly for the planes parked at Jakarta Soekarno-Hatta International Airport.

Previously, the airline had proposed covering additional expenses, including aircraft maintenance checks, to the leasing company, AirAsia. However, AirAsia had declined to sell the planes bearing registration numbers: AP-BLY (msn 2926) and AP-BLZ (msn 2944).&quot;

In October last year, a delegation led by Aviation Secretary Saif Anjum visited Indonesia to facilitate the repatriation of these two aircraft stranded at Jakarta airport.

As result of those talks, one of the planes was retrieved in December &ndash; landing in Karachi via Bangkok -- after the payment of $13 million.

The second plane also returned to the country last month &ndash; taking off from Jakarta and arriving in Bangkok, where it refueled to travel to Karachi.]]>
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			<title>AGP objects to Rs15b lent to PIA without approval</title>
			<link>https://tribune.com.pk/story/2458194/agp-objects-to-rs15b-lent-to-pia-without-approval</link>
			<comments>https://tribune.com.pk/story/2458194/agp-objects-to-rs15b-lent-to-pia-without-approval#comments</comments>
			<pubDate>Sat, 02 Mar 24 20:09:09 +0500</pubDate>
			<dc:creator>
				<![CDATA[Shahbaz Rana]]>
			</dc:creator>
			<category><![CDATA[Business]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2458194</guid>
			<description>
				<![CDATA[Finance ministry under scrutiny as auditors highlight oversight failures, call for accountability]]>
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				<![CDATA[The Auditor General for Pakistan has recommended holding individuals accountable for disbursing Rs15 billion to Pakistan International Airlines in the last fiscal year without first obtaining a business plan or government approvals for the fund release. Federal auditors have raised an audit objection against the Ministry of Finance during their examination of accounts for the fiscal year 2022-23, concluding in June of the previous year.

The audit objection highlights the ad-hoc approach taken by successive governments, including the caretaker setup, in tackling the deep-seated financial challenges encountered by Pakistan&rsquo;s third-largest public sector loss-making entity in 2022.&nbsp;

The Auditor General for Pakistan (AGP) department has raised the objection regarding the payment of Rs15 billion in interest on loans on behalf of PIA without a thorough analysis of borrowing and business plans for the fiscal year 2022-23.

Since 2018, the finance ministry has been making such payments, and if the audit extends to previous years, the total could approach nearly Rs100 billion. The decision to cover PIA&rsquo;s interest costs was made in December 2017 by the then government. However, the finance ministry failed to obtain any approval from the federal cabinet subsequently.

According to the audit objection, &ldquo;The payment of markup without an analysis of PIA&rsquo;s borrowings and business plan represents a serious lapse in management.&rdquo;

The audit recommends holding individuals accountable for disbursing grants without obtaining a business plan or formal government approval.

The auditors observed that the finance ministry paid interest on PIA&rsquo;s borrowings without scrutinising the borrowed amount or the purpose for which the funds were acquired from various banks. Additionally, the finance ministry neglected to analyse the borrowing agreements and other financial documents with the banks.

Furthermore, the objections revealed that &ldquo;no business plans for Pakistan International Airlines Corporation Limited (PIACL) were approved even after five years had passed&rdquo;.

Despite significant support from the Special Investment Facilitation Council (SIFC), the interim government failed to bring about any improvements in PIA&rsquo;s affairs. The privatisation ministry had assured the SIFC of privatising PIA before the end of January.

The privatisation ministry also presented a partial plan for the debt restructuring of PIA, which the International Monetary Fund (IMF) did not endorse last month. The IMF requested comprehensive details instead of solely focusing on the restructuring of commercial banks.

The federal auditors highlighted that before securing the Rs15 billion annual grants, PIA did not furnish &ldquo;expenditure reduction details&rdquo; to the finance ministry.

Read Cabinet okays PIA restructuring

However, finance ministry officials were of the view that auditing expenses was not within their purview. They stated that scrutinising expenses fell under the responsibility of the PIA board and the aviation ministry.

In response to the AGP, the finance ministry stated that the Economic Coordination Committee of the cabinet rectified a decision in April 2023 to increase the sovereign guarantees&rsquo; limit to Rs263 billion for PIA. However, the AGP did not accept this response.

The finance ministry asserted that it rigorously negotiated every loan facility obtained by PIA from banks. It said that the cost of PIA borrowings was only 1.45% higher than the prevailing Karachi Interbank Offered Rates (Kibor).

According to the financial advisors&rsquo; report as of September 2023, PIA&rsquo;s equity had turned negative by Rs663 billion. Last month, the federal cabinet endorsed inviting interest from potential investors to purchase 51% to 100% of PIA&rsquo;s shares.

The Ministry of Finance opposed transferring the Rs622 billion debt to the holding company and instead recommended retaining some portion of it within the core PIA.

Financial advisors have suggested transferring PIA&rsquo;s liabilities of Rs622 billion as of September 2023 to the new holding company, along with its assets. These transferable liabilities include Rs268 billion in commercial bank debt as of September 2023.

There is a prevailing sentiment that the federal government picking up the commercial banks&rsquo; debt would not resolve the issues, stressing the necessity to directly tie any debt settlement with the proceeds from privatisation.

In order to expedite the privatisation of PIA, the interim government has engaged a financial advisor at a substantial fee without adhering to the international competitive bidding process. Last month, the Privatisation Commission&rsquo;s budget was increased by 175%, or Rs2.2 billion, to compensate Ernst &amp; Young, the financial advisor for PIA.

This significant budget increase allocates the majority of the $14.53 million or Rs4.3 billion payments to the financial advisors tasked with the privatisation of PIA and the restructuring of the Roosevelt Hotel in New York.
The financial advisor for PIA is set to receive a total of $6.9 million or Rs2 billion, with 95% or Rs1.9 billion disbursed during the current fiscal year.

Likewise, the financial advisor for the Roosevelt Hotel will receive a staggering $7.65 million or Rs2.2 billion, with 60% of this payment allocated for the current fiscal year. These payments represent some of the highest compensation amounts granted to financial advisors contracted by the Privatisation Commission.

Published in The Express Tribune, March 3rd, 2024.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.]]>
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			<title>CAA snubs reports of grounding pilots</title>
			<link>https://tribune.com.pk/story/2457861/caa-snubs-reports-of-grounding-pilots</link>
			<comments>https://tribune.com.pk/story/2457861/caa-snubs-reports-of-grounding-pilots#comments</comments>
			<pubDate>Wed, 28 Feb 24 05:06:29 +0500</pubDate>
			<dc:creator>
				<![CDATA[Our Correspondent]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2457861</guid>
			<description>
				<![CDATA[Authority also defends local airlines hiring foreign aviators]]>
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				<![CDATA[The Civil Aviation Authority (CAA) clarified on Tuesday that no pilot had been grounded, nor had the issuance or renewal of their licenses stalled, refuting media reports.

The CAA stated that the process of issuing or renewing licenses for pilots, in accordance with the Pakistan Civil Aviation Act, 2023, was ongoing and followed strict rules.

Contrary to media reports, the CAA denied blocking licenses for 130 Pakistan International Airlines (PIA) pilots, which would have grounded them.

The Aircraft Owners and Operators Association (AOOA) expressed concerns over the Pakistan Civil Aviation Act, 2023, arguing that shifting the authority to issue licenses from the director to the director general of the CAA was a misstep. This change allegedly left 130 PIA pilots without licenses and unemployed.

It maintained that because of the new law, the CAA was unable to issue licences to 130 PIA pilots, rendering them unemployed.

The association appealed to the federal aviation minister to take notice of the issue as the PIA was already facing a severe shortage of pilots. It pushed the government to make changes in the new law.

The AOOA further criticised the hiring practices of local airlines, especially their preference for foreign pilots over hundreds of local and unemployed ones.

It continued that this practice not only sidelined hundreds of Pakistani pilots but also resulted in substantial financial implications, as foreign ones were reportedly receiving salaries ranging between $9,500 and $15,000 in the form of dollars.

The association noted that this trend resulted in a significant outflow of dollars from the nation, urging local airlines to employ domestic pilots.

It also alleged that these foreign pilots were benefiting from tax exemptions -- a matter it suggested should warrant scrutiny from the Federal Board of Revenue and intervention by the government.

The CAA in its statement further clarified that local airlines hired foreign pilots and this was permissible under the authority&rsquo;s rules.

These foreign pilots receive their work visas after clearance from the interior ministry and are subsequently issued with a verification certificate.

The authority added that the endorsements of the foreign pilots were renewed as per the rules at the request of the airlines.]]>
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			<title>Pakistan in for 'roller coaster' ride after parties strike deal</title>
			<link>https://tribune.com.pk/story/2457192/pakistan-in-for-roller-coaster-ride-after-parties-strike-deal</link>
			<comments>https://tribune.com.pk/story/2457192/pakistan-in-for-roller-coaster-ride-after-parties-strike-deal#comments</comments>
			<pubDate>Wed, 21 Feb 24 16:12:31 +0500</pubDate>
			<dc:creator>
				<![CDATA[Reuters]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2457192</guid>
			<description>
				<![CDATA[Most challenging task for the coalition is to agree on critical fiscal tightening conditions under a new IMF programme]]>
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				<![CDATA[The deal between two political parties to form a coalition government will be based on conditional support from one of them, the Pakistan Peoples Party (PPP), that will review decisions on a case-by-case basis, a top PPP official said on Wednesday.

Such an arrangement could make life difficult for the government, which needs to take tough decisions to steer the country out of financial crisis facing a strong opposition bloc led by supporters of jailed former prime minister Imran Khan.

&quot;It will be, of course, a roller coaster,&quot; said political commentator and author Ayesha Siddiqa of the road ahead for the next government.

The agreement between Bilawal Bhutto-Zardari&#39;s PPP and the Pakistan Muslim League-Nawaz (PML-N) of three-time Premier Nawaz Sharif late Tuesday night ended days of uncertainty and negotiations after an inconclusive Feb. 8 election.

But the PPP is not taking cabinet positions, its secretary of information, Faisal Karim Kundi, told Reuters, and its support in parliament would depend on the party&#39;s stance.

&quot;We will support policy decisions on an issue-to-issue basis,&quot; Kundi said, adding that PPP would vote for the PML-N&#39;s prime minister candidate, Shehbaz Sharif, younger brother of party chief Nawaz Sharif.

Read also:&nbsp;After PPP, PML-N woos other coalition partners for govt formation

The most challenging task is to agree on critical fiscal tightening conditions under a new International Monetary Fund (IMF) programme.

The current IMF programme expires in March.

Other big moves include privatisation of loss-making state owned enterprises such as the flagship carrier Pakistan International Airlines (PIA).

Kundi said the PPP would not support the privatisation of the airline, while the PML-N would want to fast-track it.

In return for supporting the formation of government by PML-N, PPP will seek the offices of president, chairman of the upper house of the parliament, and governors in two of the four provinces, he said.

Read:&nbsp;Bilawal stands firmly by PPP&#39;s stance on govt formation

PML-N spokesperson Marriyum Auranzeb did not respond to a request for a comment.

Markets on Wednesday reacted positively to the news of an alliance, which removed days of uncertainty. Pakistan&#39;s benchmark share index (.KSE), opens new tab rose 1.81%.

The index had fallen more than 5% since the elections.

Pakistan bonds recovered after three straight day of falls. The December 2027 bond was the biggest gainer, rising 2.58 cents, closely followed by the April 2031 bond which rose 2.54 cents.

PML-N&#39;s 79 and the PPP&#39;s 54 seats together make a simple majority in parliament to form a government, which, however, will also rope in smaller parties in the coalition.

Candidates backed by Imran Khan won 93 seats, but do not have the numbers to form a government. He and his party have rejected the results of the elections, alleging widespread rigging.]]>
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			<title>Cabinet okays PIA restructuring</title>
			<link>https://tribune.com.pk/story/2455682/cabinet-okays-pia-restructuring</link>
			<comments>https://tribune.com.pk/story/2455682/cabinet-okays-pia-restructuring#comments</comments>
			<pubDate>Tue, 06 Feb 24 20:42:07 +0500</pubDate>
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				<![CDATA[Shahbaz Rana]]>
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			<category><![CDATA[Business]]></category>
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				<![CDATA[Directs special panel to iron out differences over impact of airline’s bifurcation]]>
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				<![CDATA[The federal cabinet on Tuesday approved the restructuring of Pakistan International Airlines (PIA) but directed its specialised panel to sort out differences between the ministries of finance and privatisation over financial implications of the bifurcation of the airline for the budget.

The cabinet gave the green light to invite interests from potential investors for selling 51% to 100% stake of PIA &ndash; Pakistan&rsquo;s third highest loss-making entity. Prime Minister Anwaarul Haq Kakar chaired the cabinet meeting.

The cabinet was apprised that the Supreme Court had barred the government in 2018 from taking further steps for PIA privatisation without its prior consent. The privatisation ministry has filed a petition to inform the court about the developments but it has not yet got a hearing date.

According to the PM Office, the cabinet approved the restructuring of PIA. The Cabinet Committee on Privatisation (CCOP) was directed to resolve the issue related to payables of government-owned departments, said a press statement.

The privatisation ministry did not first take the matter to the CCOP and took it directly to the cabinet. The CCOP, like the Privatisation Commission board, is also chaired by Privatisation Minister Fawad Hasan Fawad, which leaves little room for an independent oversight.

The CCOP will meet on Wednesday to iron out differences between the finance ministry and the privatisation ministry.

The cabinet&rsquo;s approval was sought for setting up a new holding company and transferring Rs622 billion to the firm, selling 51% to 100% stake of PIA and shifting the employees of Precision Engineering Complex (PEC) to the holding company. Cabinet members appeared to be in agreement but due to objections from the Ministry of Finance it was decided to hand over the new structure&rsquo;s financial issues to the CCOP, according to a member of the cabinet.

Financial advisers have proposed a major incentive for the buyers by allowing the use of PIA&rsquo;s deferred tax assets for 10 years instead of six years. However, this requires an amendment to the Income Tax Ordinance, which the finance ministry has opposed.

The cabinet gave approval for a bridge financing of Rs10 billion, to be arranged from the Civil Aviation Authority (CAA).

The cabinet was informed that foreign investors could not buy more than 50% shares under the Civil Aviation Act and Air Service Agreements. So, the foreign investors would have to enter into an arrangement with local investors for acquiring majority shares.

The financial advisers have submitted the draft of restructuring, legal segregation and transaction structure. But they have failed to submit the valuation report.

Sources said that the finance ministry opposed the privatisation ministry&rsquo;s proposal to write off PIA&rsquo;s debt of Rs140 billion. It also expressed concerns that no firm timeline had been given for the airline&rsquo;s privatisation. The Ministry of Finance opposed the transfer of Rs622 billion worth of debt to the holding company and instead recommended to keep some part of it with the core PIA. It also refused to provide any liquidity support to PIA before and after its privatisation.

In a major objection, the finance ministry said that there should be clarity about the valuation of PIA before and after its segregation. It opposed the extension of the benefit of deferred tax assets from six years to 10 years, saying it could set a precedent for other loss-making entities.

The Ministry of Finance&rsquo;s main objection was that PIA&rsquo;s debt and liabilities settlement plan should be prepared in a systematic manner. It opposed the privatisation ministry&rsquo;s focus mainly on transferring Rs268 billion worth of commercial banks&rsquo; debt to the federal government books.

Read ECP asks govt to stop PIA privatisation

The International Monetary Fund (IMF) on Monday did not approve the PIA&rsquo;s debt restructuring plan and sought more details, particularly the treatment of the Federal Board of Revenue (FBR), CAA and Pakistan State Oil (PSO) debt.

The finance ministry highlighted that the privatisation ministry had not yet secured the concurrence of all private and public sector lenders, and service providers for the segregation of PIA into two entities.

The financial advisers&rsquo; report revealed that as of September 2023, PIA&rsquo;s equity turned negative by a whopping Rs663 billion.

It has been proposed that negotiations should be held with potential investors to retain PIA employees for three years. There is still a need to update PIA liabilities till December 31 before its bifurcation.

Core and non-core

The financial advisers recommended that the Precision Engineering Complex, Pakistan International Investment Limited owning Roosevelt Hotel and Scribe Hotel and certain real estate assets should be treated as non-core assets and should not be privatised.

All ancillary services including engineering, ground handling, cargo, flight kitchen and training, as core assets, should be retained in main PIA for privatisation. However, the advisers underlined that their treatment as core assets would depend on the investors&rsquo; willingness to buy them.

Liability plan

The financial advisers proposed that the liabilities of Rs622 billion as of September 2023 should be transferred to a new holding company along with assets. These transferable liabilities include Rs268 billion in commercial bank debt.

However, the government would need no-objection certificates from these banks before filing the scheme of arrangement with the SECP.

The Rs173 billion debt due to be paid to the federal government and advances from subsidiaries should also be transferred to the holding company. Similarly, all liabilities of Rs144 billion of the CAA, PSO and National Insurance Corporation Limited should be transferred to the holding company.

The advisers proposed to transfer Rs38 billion in pension liabilities to the federal government. The Rs6 billion worth of real estate, Rs6 billion in overdue advances and Rs8 billion worth of subsidiary balances are also proposed to be transferred to the holding company. The financial advisers proposed that the liabilities of Rs203 billion, mainly of foreign banks, should be retained in PIA along with Rs141 billion in operating assets.

The breakdown of Rs203 billion worth of liabilities showed that all commercial debt of Rs16 billion owed to foreign commercial banks should be retained in PIA. Payables of Rs64 billion to creditors mainly lessors and fuel suppliers should also be retained in PIA and offered to the buyers.

The advisers proposed that the operational liabilities of 104 billion related to fleet, employees deferred liabilities and trade payables may be retained in PIA.

Published in The Express Tribune, February 7th, 2024.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.

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			<title>ECP asks govt to stop PIA privatisation</title>
			<link>https://tribune.com.pk/story/2455541/ecp-asks-govt-to-stop-pia-privatisation</link>
			<comments>https://tribune.com.pk/story/2455541/ecp-asks-govt-to-stop-pia-privatisation#comments</comments>
			<pubDate>Mon, 05 Feb 24 06:28:33 +0500</pubDate>
			<dc:creator>
				<![CDATA[Our Correspondent]]>
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			<category><![CDATA[Pakistan]]></category>
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			<description>
				<![CDATA[Requested the federal government not to enter into any kind of agreement related to the PIA privatisation]]>
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				<![CDATA[The Election Commission of Pakistan has asked the caretaker provincial government to stop the privatisation process of the Pakistan International Airlines (PIA) in view of the upcoming general elections on Thursday, next week.

The ECP also requested the federal government not to enter into any kind of agreement related to the PIA privatisation, seeking the plan documents prepared by the federal cabinet for the privatisation of the PIA.

Read:&nbsp;Interim govt seals plan to privatise PIA

Last week, Privatisation Minister Fawad Hasan Fawad said the interim government was making &ldquo;binding plans&rdquo; for the incoming government after the Feb 8 elections to privatise the loss-making PIA.

In the past, elected governments shied away from undertaking unpopular reforms, including the sale of the national-flag carrier. However, in June, the then coalition government led by the Pakistan Muslim League Nawaz President Shehbaz Sharif agreed to overhaul the loss-making state-owned enterprises under a deal with the International Monetary Fund.]]>
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			<title>Loss of flag carrier</title>
			<link>https://tribune.com.pk/story/2455289/loss-of-flag-carrier</link>
			<comments>https://tribune.com.pk/story/2455289/loss-of-flag-carrier#comments</comments>
			<pubDate>Fri, 02 Feb 24 20:48:13 +0500</pubDate>
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			<category><![CDATA[Editorial]]></category>
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			<description>
				<![CDATA[Going down of PIA, which nation used to take pride in, is a national tragedy]]>
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				<![CDATA[Privatisation of the national airline is in full swing. The hasty process is being undertaken owing to the dilapidated health of the carrier, which is in dire straits from financial and administrative ends. Moreover, it is an integral part of the deal with the IMF to shred off the deadwood units, in an attempt to turn around the economy. Thus, PIA with liabilities of Rs785 billion ($2.81 billion) and accumulated losses of Rs713 billion as of June last year is the first to go on the list of lessening debentures. To add to this remorseful statistics is an additional loss of Rs112 billion procured in the year 2023, pushing its legacy debt to around Rs825 billion, including negative equity of loans, creditors&rsquo; money and losses.

This pathetic state of affairs is all owing to mismanagement and corruption, and the national asset was ruined to serve personal interests. There is no dearth of people among the stakeholders who deliberately grounded the national carrier for a vested deal with foreign aviation. This is why the speed of the privatisation is also being questioned as it would devalue the airline&rsquo;s worth, and compromise on transparency of the deal.

It is hoped that a 51% stake with full management control would be offered to the new buyer(s) after parking the airline&rsquo;s debts in a separate entity. This strategy is fraught with consequences as the decision of the outgoing parliament to empower the caretaker government to go ahead with the sale might sooner than later hit litigation. Moreover, besides losses and debt, PIA&rsquo;s governance and safety standards are also up for debate by global aviation experts.

The going down of PIA, which the nation used to take pride in, is a national tragedy. It is unfortunate that efforts to resurrect the airline on modern and viable lines were a victim of lethargy. Its infrastructure is untenable to international standards, and service is on the decline. As the privatisation comes full circle, in due course of time, there is need for some soul-searching as to how and why we lost the flag carrier.

Published in The Express Tribune, February 3rd, 2024.

Like Opinion &amp; Editorial on Facebook, follow @ETOpEd on Twitter to receive all updates on all our daily pieces.

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			<title>Interim govt seals plan to privatise PIA</title>
			<link>https://tribune.com.pk/story/2455334/interim-govt-seals-plan-to-privatise-pia</link>
			<comments>https://tribune.com.pk/story/2455334/interim-govt-seals-plan-to-privatise-pia#comments</comments>
			<pubDate>Sat, 03 Feb 24 04:49:52 +0500</pubDate>
			<dc:creator>
				<![CDATA[Our Correspondent]]>
			</dc:creator>
			<category><![CDATA[Pakistan]]></category>
			<guid isPermaLink="false">https://tribune.com.pk/?p=2455334</guid>
			<description>
				<![CDATA[Fawad says cabinet to give final approval]]>
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				<![CDATA[The caretaker government was making &ldquo;binding plans&rdquo; for the incoming government after the February 8 elections to privatise the loss-making Pakistan International Airlines (PIA), Privatisation Minister Fawad Hasan Fawad said on Friday.

In the past, elected governments have shied away from undertaking unpopular reforms, including the sale of the national-flag carrier. However, in June, the then coalition government agreed to overhaul loss-making state-owned enterprises under a deal with the International Monetary Fund (IMF).

The government, then led by Shehbaz Sharif, decided to privatise PIA just weeks after signing the IMF agreement. The caretaker government, which took office in August, was empowered by the outgoing parliament to take any steps needed to meet the budgetary targets agreed with the IMF.

&ldquo;Our job is 98% done,&rdquo; Fawad told Reuters when asked about the plan to sell the airline. &ldquo;The remaining 2% is just to bring it on an excel sheet after the cabinet approves it,&rdquo; 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 &amp; Young, would be presented to the cabinet for approval before the tenure of the administration ends following the election. &ldquo;What we have done in just four months is what past governments have been trying to do for over a decade,&rdquo; Fawad said.

&ldquo;There is no looking back,&rdquo; Fawad added. He did not give specific details of the size of the stake to be sold, but two sources said that a 51% stake with full management control would be offered to buyers after parking the airline&rsquo;s debts in a separate entity, under the 1100-page report from Ernst &amp; Young.

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 privatisation will be a key issue if the incoming government goes back to the IMF once the current bailout programme expires in March. Caretaker Finance Minister Shamshad Akhtar told reporters last year that Pakistan would have to remain in IMF programmes after its expiry.

Besides operational and technical measures for PIA&rsquo;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&rsquo;s website.

Ishaq Dar, who was the finance minister when Shehbaz was the prime minister and has been named by the Pakistan Muslim League-Nawaz (PML-N) to retain the portfolio if it forms the next government, told Reuters that the sale of PIA will be fast-tracked. &ldquo;It will, God willing, move ahead with fast speed.&rdquo;

In a report in mid-January, the IMF expressed satisfaction over the measures initiated by the caretaker government to accelerate reforms of state-owned enterprises, specifically mentioning the amendment of the PIA privatisation law.

Under the privatisation plan submitted by Ernst &amp; Young to the government on December 27, government-guaranteed legacy debt and payables &ndash; which are held by a consortium of seven domestic banks &ndash; would be parked in a holding company, Fawad and two sources involved in the process said.

Fawad said the government and the consortium had an agreement in place regarding the settlement of the legacy debt, which includes negative equity of Rs825 billions in loans, creditors&rsquo; money and the losses. He provided no further details.

The sources had earlier said the banks wanted a five-year bond issued against the debt with a 16.5% coupon on the paper, while the finance ministry was offering only 10%. The banks have not commented on the deal.

Read:&nbsp;Plan for PIA sell-off submitted

Besides its losses, PIA&rsquo;s safety standards have been questioned by global aviation authorities for some years. In early 2020, Czech and Hungarian air force jets were scrambled to intercept a PIA flight with 300 people on board as it went astray due to an &ldquo;avoidable human error&rdquo; by its pilot.

In May that year, the crash of a PIA plane in Karachi killed nearly 100 people and a fake pilot licence scandal erupted later in 2020. The scandal led to the European Union Aviation Safety Agency (EASA) banning the airline from flying to its most lucrative routes in Europe and the UK.

The 2020 ban is still in place and has cost the airline nearly Rs40 billion in revenue annually, according to government records presented in parliament. Pakistan&rsquo;s financial crisis has also led to seizure of PIA aircraft by creditors in recent months, according to the airline.

While the airline awaits the government&rsquo;s decision on a sale, it continues to need financial support: 23.7 billion rupees are required to keep it afloat for another five to six months before control is given to a new buyer, three government and PIA sources said.

However, not everyone agrees with pressing ahead speedily with the sale. Three senior airline officials, who spoke to Reuters on condition of anonymity, said a fast sale could devalue the airline&rsquo;s worth, and that it would not be a transparent transaction without due diligence.

But Singapore-based aviation analyst Brendan Sobie said PIA is in dire straits: the plan submitted to the government was &ldquo;essentially the only option to save&rdquo; the airline. &ldquo;The privatisation will be challenging and a sale is likely not possible unless it first undergoes a deep restructuring and the debts are cleared.&rdquo;

PIA&rsquo;s assets include key slots at the world&rsquo;s busiest airports and air routes to top European destinations, the Middle East and North America. PIA has air service agreements with more than 150 countries and generates about Rs280 billion annually in revenues despite the EU ban, airline records show.

It has 10 slots at Heathrow, which, according to two PIA officials, are currently worth Rs70 billion annually. It has a further nine slots at Manchester and four at Birmingham. Turkish and Kuwaiti airlines have been operating 70% of the slots under a business arrangement with PIA, the PIA officials said.

Separately, PIA&rsquo;s physical assets, which include aircraft, hotels in Paris and New York and other properties, are worth Rs105.6 billion as per book value, according to the airline&rsquo;s annual report for 2023. PIA officials, however, said the market value of the assets could be above $1 billion. In any case, the hotels and other properties would not be up for sale, they said. Reuters]]>
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