The government appears to be taking significant measures to try to improve the national airline. PHOTO : FILE
To its credit, the government appears to be taking significant measures to try to improve the national airline. The newly-constituted board of directors, all titans of industry from the private sector, appear to have been empowered to make tough decisions and force through meaningful reforms in the company.
But there are also some causes for concern about the current board, most notably the fact that it includes many figures who have built entire conglomerates by buying companies from the government in privatisation transactions. The government faces a real dilemma: on the one hand, these people are clearly equipped to deal with the sort of issues that a company goes through when it is transitioning from state ownership to functioning more like a private business, but on the other hand, these people are also likely to be interested buyers, raising serious conflicts of interest.
The problem is not an insurmountable one, but the federal government needs to take steps to ensure that these potential conflicts of interest are managed. The current board members, for instance, should be required to declare at the outset that any companies in which they are significant shareholders or directors will not place any bids in the eventual privatisation auction of the national airline.
Given the fact that PIA has haemorrhaged over Rs100 billion in the last four years in losses, we most certainly welcome its restructuring and privatisation. But the process must be made more transparent and fair. Otherwise, we will only have traded one form of economic inefficiency for another
Published in The Express Tribune, July 16th, 2013.
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COMMENTS (4)
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"The country can ill-afford to keep sending good money after bad investments."
Of course the politicians can ill-afford to send all their corrupt money to PIA. Who will take care of their overseas bank accounts if all public money is spent on developmental work?! This is ridiculous - how can the editors of this newspaper and the normal poor Pakistani public even think of saving the state-owned PIA? They need to worry more about their beloved leaders' financial status. Who cares what happens to the country!
What sort of people are we ... First we try to build public opinion to do the wrong thing instead of correcting the problem and then we present the solution that is for our own benefit .. were not we the people who were saying Ajmal Kasab is from Pakistan ..Look at the people with wrong opinions we are .. people first get educated then make some sensible decision... PIA's problem is the honest management and Government cannot just Replace 10-15 People instead it is selling the Most Valuable public sector organization that is build through public money ... OIA has huge assets "Billion of US Dollars in Overall World" and they will go in the hands of these "Seths" who are just making pile of money no matter from what means .. Think again you foolish public ...anyone can fool you like Media did in case of Ajmal Kasab and MQM and so called fair elections ,,
New Board doesn't have expertise in airline industry but does have a substantial record in influencing govt decisions/contracts in their own industries - not sure that's a positive sign in my book. Further - new board sponsored another bail out without any meaningful changes in operation of PIA - hows that any different than before? Perhaps the relevant question is why Pakistan believes it needs a national airline -- most countries don't have one and they do just fine.
PIA (Praise In Allah) i.e. if you fly em.