Abbasi gives go-ahead to PIA, PSM privatisation

PM chairs meeting of Cabinet Committee on Privatisation at PM’s Office


Sardar Sikander February 16, 2018
Prime Minister Shahid Khaqan Abbasi. PHOTO: APP/FILE

 ISLAMABAD  : Prime Minister Shahid Khaqan Abbasi gave on Friday the formal go-ahead for the privatisation of two major yet loss-making state-run entities -- Pakistan International Airlines and the Pakistan Steel Mills -- apparently on the pretext of ‘restructuring’.

He granted the related approval while presiding over a meeting of the Cabinet Committee on Privatisation (CCoP) at the Prime Minister’s Office.

The development takes place at a time when the government has expedited the process to privatise state-run entities -- including the Civil Aviation Authority (CAA) -- a move that has raised eyebrows given that CAA, being the commercial aviation regulator, contributes up to Rs60 billion to the national exchequer annually.

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During a recent meeting with a select group of journalists including this correspondent, the prime minister strongly advocated the privatisation of PIA and CAA, saying PIA was incurring a loss of Rs150 million daily to the national kitty.

He also said that CAA lacked the capacity to run ‘modernised and advanced' airports like the New Islamabad International Airport whose operations needed to be ‘outsourced' (to the private sector).

“Have a look at the condition of washrooms at our airports, if CAA is not capable of maintaining toilets, what else is it capable of?” he had asked.

An official source said it is ‘unfair’ to compare a loss-making entity like PIA to that of a profitable organisation like CAA. The CAA employees are considering to move court against privatisation plan surfaced recently, he said.

“Nowhere in the world are the profitable state-run entities handed over to the private sector. Let us not reinvent the wheel — only to oblige some business groups that have personal stakes in the aviation industry,” he said.

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A PM Office press release said the meeting discussed issues related to PIA and PSM.

“After a detailed presentation on PIA and the discussion that followed, the CCoP gave the go-head to the proposal for initiating the restructuring process in PIA,” the press release said.

“It was decided during the meeting to segregate the core and non-core functions of the organisation.”

Minister for Privatisation Daniyal Aziz gave a detailed presentation on various issues, including financial challenges, faced by the two organisations, and the possible way forward for addressing those issues on permanent basis.

The prime minister in his remarks observed that past mismanagement and neglect of the two important organisations had not only resulted in the creation of huge financial liability, on annual basis, for the government but also caused great difficulties for the employees of the organisations.

The meeting discussed in detail various administrative, financial and employees related issues of PSM.

A proposal for PSM entering into a ‘concession’ agreement with investors, on revenue sharing basis, also came under discussion, the statement said.

The prime minister directed that all options should be explored and a comprehensive plan should also be worked out for addressing employees related issues, it added.

COMMENTS (9)

Ishtiaq Ahmed | 3 years ago | Reply I absolutely support this move. We should have privatized or even closed PIA long ago. Why should an enterprize which drains R.150 million daily of taxpayer money be allowed to operate. About CAA, it is profit making not because it is innovate and efficient. It is simply due to landing charges and ground support facilities income. The current income or profit will increase 10 folds if it is run professionally. Bear in mind, CAA is an aviation regulator which should not be an operator. This in itself is a conflict of interest.
bashir gul | 3 years ago | Reply All our elected members on serve their own interest. Enjoy the perks and protocol, and promote their own business interest by devastating state enterprises. Selling PIA will only benefit Air Blue owned by the PM. The idocy of the matter is that the government sold an Airbus 310 for peanuts, and claim they save six jet engines going with that sale.
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