Selling PIA

On December 7, the federal government was allotted 2.357 billion additional shares against equity

This is what the PML-N wants to boast about — that it is not a two-tranche government, and that it will be able to see the IMF loan programme to its end. In that endeavour, in the past few days, it has levied additional taxes worth Rs40 billion and promulgated a presidential ordinance to clear a legal hindrance in the way of selling its stake in the national carrier, PIA. President Mamnoon Hussain promulgated the PIA Corporation Conversion Ordinance, with the entity now being called, PIA Company Limited. The PIA Act of 1956 thus stands repealed. This is an interesting development because under that Act, the federal government had absolute say in how the national carrier would operate. The Act also stated that, at no time, would the federal government hold shares of value less than 51 per cent of the value of shares issued by the corporation. On December 7, PIA increased its authorised share capital from Rs30 billion to Rs54 billion, while the federal government was allotted 2.357 billion additional shares against equity.

Being allotted additional shares might help the government get a better deal when it decides to sell its stake in the national carrier. And this is what this whole process amounts to — a business transaction. A business-minded PML-N has looked everywhere to increase revenue and reduce expenditure. But has it looked to get its house in order? Many decisions that the PML-N has taken have made sense from a commercial point of view, but it must be noted that many of these were made bypassing parliament. The government might call itself democratic, but from the proposed cybercrime bill and imposing additional taxes to the PIA Corporation Conversion Ordinance, a robust debate in parliament has been lacking. There is no doubt that the national carrier needed restructuring. But the government is unwilling to spend more on a potentially huge source of income because the turnaround will take time and it doesn’t have that luxury. Deep-rooted corruption at all levels needed to be eliminated to help PIA. Being the owner, the federal government needed to take that responsibility. If PIA is today under piles of debt, it is the owner’s fault, which has spent billions of taxpayers’ money on the national carrier, but has not been able to turn it around.

Published in The Express Tribune, December 8^th,  2015.

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