Govt approves laying off one-third PIA employees

ISLAMABAD:

The Pakistan Tehreek-e-Insaf government on Monday approved, in principle, a plan that seeks to lay off over 3,800 regular and contractual employees of Pakistan International Airlines (PIA) — one out of every three persons — to cut annual losses by Rs4.2 billion.

The Economic Coordination Committee (ECC) of the Cabinet, which approved the Voluntary Separation Scheme (VSS) for the PIA employees, also sanctioned over Rs38 billion additional budget for the military to fence Pak-Afghan border and give allowances to the armed personnel.

The ECC approved Rs12.87 billion as the cost of VSS to be paid in two- and-a-half years’ time.

The PTI government has already approved a plan to lay off 9,350 employees of the Pakistan Steel Mills.

“After through discussion, it was decided to approve, in principle, the voluntary separation from service scheme for PIA,” the Ministry of Finance announced after the meeting of the ECC.

The decision to offer VSS to about 3,861 regular and contractual employees and restrict the PIA own workforce to around 7,500 employees to manage 30 aircraft also suggests that Prime Minister Imran Khan does not have a plan to expand the PIA operations.

In addition to 3,861 positions that have been declared surplus there are another 644 positions, being filled through outsourcing but are not required in under the new operations plan.

In its working, the Aviation Division has actually shown 4,505 surplus staff, which is 31% of the existing total workforce of 14,576 employees. There are 11,356 regular and contractual employees and another 3,220 positions are outsourced. Against 11,356 regular and contractual employees, the PIA management has declared 3,861 as surplus, which is 34% of the regular and contractual workforce.

The number of outsourced employees is 3,220 and 644 positions have been declared surplus.

“The PIA management has planned to achieve the 1:250 (250 per aircraft employees) ratio for 30 aircraft, total 7000 to 7,500 employees are deemed to be the right size for PIA,” according to the ECC summary.

The laying off of 3,500 employees would result into annual saving of Rs4.2 billion and the government will recover the Rs12.9 billion VSS cost within two-and-a-half years, the Aviation Division stated.

The PIA management has proposed that in the engineering department 1,173 people or 31% of the total workforce is surplus. In the commercial department, as many as 540 employees and outsourced positions have been declared surplus, which is 30% of the workforce.

In the flight operations department, 244 employees; ACP 709; flight services 603; food services 189 and in finance department 171 employees have been declared surplus.

According to the Aviation Division summary, the liquidity requirements for PIA voluntary separation plan had been approved in principle by Prime Minister Imran Khan in April last year.

The Aviation Division had presented the VSS plan to the ECC in July last year, which the cabinet body had deferred until the completion of Hajj operations last year.

Defence budget

The ECC also approved four separate Technical Supplementary Grants for the Ministry of Defence and Ministry of Interior for various projects during current FY 2020-21, according to the finance ministry. The ministry did not disclose the details of these supplementary grants.

The ECC approved Rs26.9 billion additional budget for the military to fence Pak-Afghan border. It also sanctioned Rs6.2 billion for paying salaries to Special Security Division (North).

The division has been established to provide protection to the China-Pakistan Economic Corridor (CPEC). Another Rs5 billion was approved for internal security duty allowance for the military.

Last year, Finance Adviser Dr Abdul Hafeez Shaikh had directed that all these grants should be made part of the regular defence budget.

The finance ministry stated that in the light of a summary presented by the Ministry of Information and Technology regarding manufacturing of SIMs/Smart-cards in Pakistan, the ECC constituted a committee to examine the proposal and present a report for a way forward within two weeks.

Likewise, ECC recommended to form a committee consisting of representatives from the Ministry of Commerce and Ministry of National Food Security and Research to decide a timeline for the export of mangoes and kinnows.

The ECC gave concurrence to the proposal by the Petroleum Division, in principle, regarding allocation of gas from Bashar X-IST to third party up to one million MCFD. The ECC approved budgetary allocation in favour of NITB for provision of ICT services at the Prime Minister’s Office for Prime Minister’s Kamyab Jawan Programme for FY2020- 21 to the tune of Rs53 million.