PIA sell-off ordinance converted into bill

Published: January 5, 2016



The federal government has converted the repealed PIA privatisation ordinance into a bill to keep the PIA sell-off option open.

By turning the repealed ordinance into a bill, the government has ensured the bill will be debated by the National Assembly’s Standing Committee on Cabinet instead of the PIA Special Committee, which has been formed to decide the fate of the struggling national airlines.

PML-N government paves way for PIA privatisation

Once cleared by the standing committee, the bill will again go to the Senate for voting. The upper house will have three months to take its decision.

Last month, the government had promulgated the controversial PIA ordinance to repeal the PIA Act of 1956, aimed at removing a legal hindrance in its privatisation. However, the Opposition-dominated Senate invoked Article 89 of the Constitution, repealing the ordinance in a rare move.

The original due date for the airline’s privatisation was December 2014, which the International Monetary Fund (IMF) has revised three times. The government has already missed the donor’s deadline of December 31 for inviting investors for PIA. The IMF has also set June 2016 as the deadline for PIA’s privatisation, which the government is likely to miss again.

Change of heads

Meanwhile, Federal Climate Change Minister Zahid Hamid has been elected as the chairman of the PIA Special Committee that will decide the fate of PIA. The special committee was constituted under a National Assembly resolution with a mandate to oversee matters arising out of the implementation of the repealed PIA ordinance.

Opposition unrelenting in protest against ‘PIA sell-off’

Hamid was elected with a majority vote in the first meeting of the committee on Monday, defeating the Opposition’s joint candidate, Naveed Qamar of the Pakistan Peoples Party.

The Muttahida Qaumi Movement, Pakistan Tehreek-e-Insaf, Awami Muslim League and Jamaat-e-Islami had all voted in favour of Qamar, who served as the privatisation minister in the previous government. During the meeting, Finance Minister Ishaq Dar announced the government would honour any decision taken by the committee.

The government would invite expression of interests (EOIs) from prospective bidders for selling stakes in the national airlines only after getting clearance from the special committee. “The government is not stubborn as it believes in collective wisdom,” he said during the meeting, urging the committee take the decision holistically, as the cumulative losses at the airlines have reached Rs296 billion.

PIA’s complete privatisation, Dar added, was not on government’s agenda. The core business, including the air routes will be offered to the investors, he said while giving the future roadmap of the airline’s privatisation. Depending on the investors’ response, the engineering and catering operations may also be offered to the investors. About 26% stakes in PIA will be offered to a strategic investor, which cannot be termed privatisation, according to the finance minister.

Senate throws spanner in works of PIA’s sell-off

Dar said the organisation would be split into two and the government would retain the debt-ridden, non-core business and the employees.

However, PTI’s Asad Umar questioned him if overstaffing was the reason for PIA’s losses and the government bound the new investor from firing any employee, how would the investor make the airline profitable? “The government’s strategic partnership is actually PIA’s privatisation,” Qamar interjected while urging the treasury members to tell the truth.

Dar replied that in case the government did not get encouraging response from the investors, the airline’s restructuring would continue.

Published in The Express Tribune, January 5th, 2016.

Facebook Conversations

Reader Comments (2)

  • cautious
    Jan 5, 2016 - 5:04AM

    You will never find anyone who wants to buy 26 percent of a losing airline which can’t make fundamental changes in operation because of government interference … so why all the fuss? Put a “for sale” sign on the door and when nobody answers tell the IMF that you made your best effort and move on.
    The important issue that nobody wants to discuss is why Pakistan taxpayers continue to invest Billions into an airline which provides lousy service, has lousy management, generates enormous losses and has no chance of ever repaying the money invested/loaned. Just because you tag the name Pakistan on an airline doesn’t make it Strategic. Most countries get along just fine without a National Airline – USA comes to mind.Recommend

  • Syed
    Jan 5, 2016 - 10:03AM

    @cautious: Streamline and Restructure PIA such that it can be optimally managed and operated by an efficient and effective and dedicated staff and policies – will itself bring the PIA into profit – but somehow it doesn’t look like the govt, would is sincerely interested in giving it a “real thought process” if they wanted to turn PIA around.Recommend

More in Pakistan