The Prime Minister gave the go-ahead for an initial phase of privatization which will see 26% of the airline's shares privatized. PHOTO: FILE
The decision was taken during a meeting chaired by the Prime Minister at the PM House in Islamabad.
The Prime Minister gave the go-ahead for an initial phase of privatisation which will see 26% of the airline's shares privatised.
An official statement issued from the PM's office instructed the authorities to:
"Ensure complete transparency, adherence of all relevant codal formalities and guidelines of the superior courts in the process so that not only people benefit from a qualitatively better service but the overall image of the national flag carrier also gets a boost both nationally and internationally."
Sharif directed that the procedure be conducted "in an open and transparent manner to make PIA competitive and service-oriented." He further asked the management of the airline to focus on their operational efficiency, cut down their wasteful expenses and promote their qualified professionals for meeting the modern day competitive environment in the air transport industry.
Sources said that minister for planning and development Ahsan Iqbal has done lot of engineering to convince prime minister for this decision as he had warned PIA of dire consequences including ‘privatisation’ if it failed to improve its services.
The meeting was attended by Finance Minister Ishaq Dar, Information Minister Parvez Rashid, Petroleum Minister Shahid Khaqan Abbasi and other senior officials.
According to the officials at PM’s office, state-owned institutions such as PIA, Pakistan Steel Mills, Pakistan Railways, Wapda and others are unprofitable corporations are presently carrying losses of Rs 400-500 billion per annum.
COMMENTS (38)
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It should be 100 percent privatised
Our leaders are corrupt so our SOE's M.D's are corrupt. Besides corruption they are also incompetent. They cannot take these decision fairly. I would request to sold the 26% share of Pakistan to China so that China will run our country fairly and if country runs fairly its all state owned enterprise will run on merit and will became profitable.
why my comments have been removed?
currently the staff ratio of PIA is more than 450 people per aircraft. The Industry norm and Standard is 160 employees per aircraft. here 450 are official term, few un-official sources reveal that this figure might touch to 700. so here main problem is over employment. Weather Company should privatise or not, downsizing and restructuring is necessary. without downsizing no plan will change losses into profits.
The Best Example for privitisation is PTCL where Govt Sales 26 % shares under the head of B-TYPE share which also give right to run managment to ETISALAT. now we can see that PTCL is running very Good.
Great decision, they can hire another 10,000 political affiliated people in PIA to get the political benefits but they privatized 26% of the airline’s shares, which makes it possible for the new management to hire/fire people who are not performing since so many years. I hope PIA will become profit making company in couple of years, Insha'Allah
@PRAGMATIST: @Mashkoor: When Lieutenant General Abdul Qayyum took over as Chairman of Pakistan Steel Mill in January 2004, it had an accumulated loss of Rs. 4 Billion. In few years, it had earned a pretax gross profit of nearly Rs.18 billions.
@Dirk: @Anwer Chughtai: PIA was at its peak when Air Marshal Nur Khan was at the helm of affairs. We all know and agree that the issue with PIA is that it is not being run as an airline and is seriously over staffed. The unions at PIA have become so powerful mainly because of support from the political governments that they will not allow any downsizing or restructuring. Anyone who is given the management of PIA (whether civilian or ex-armed forces) will have to bring the employee to aircraft ratio to the industry standard. This is a no brainer but like many other sectors, non implementation of tough decisions is the main issue.
@Nadir: silliest possible excuse u cud ever think of, since it has been grinded to a halt by inept ministry of defence itself not the civilians. It was civilians like oman qureshi who took airline to a top 10 status. stop living in ur ego filled idiotic world. its precisely why PIA was taken away from the ministry of defence since it was ineptly run by them.
oh shut up @nadir.. You do not know what you are talking about!
BTW, just who is going to buy that 26% of PIA, knowing full well that they will have no guarantee of ever seeing their money again since it will always be "business as usual" at PIA!!!
Good move. Better late than never.
Why did Nawaz government in last tenure cancelled the privatization of PIA? it was in loss by then years.
@sunny: They strike because they they know that their negligence will not go unpunished. Good move. This is a step in the right direction. Although, it'd be better if the private stake holder gets greater than 50% so management decisions are taken by them. But I hope this was not granted to some relative or friend or himself.
I reside in the US and have been visiting Pakistan almost every year for the past 24 plus years. I have witnessed the gradual decline of PIA to the point that I now refuse to fly PIA and have avoided it like the plague since the 14 years. I would however love to give business and my money to the National carrier, only if they provide professional service fitting an international airline. I am hoping that this move will improve PIA's standards.
@Nadir: Well when uniform people have tried to run a government or any institution they have created more mess plus it is not the business of a government to do business so all the SOEs(State Owned Enterprises ) must be privatised.
Although I firm Federalist I am in favor of privatization of ALL entities who are causing burden to tax paying citizenry.
Good move, should have been done earlier.
(PS....and those who are advocating against privatization of PIA due to strategic asset etc, they should know that a much more sensitive nature is telecommunication and airspace, both of which are privatize & liberalize and hence both sectors contributed to uplifting of economy and country at large)
regards,
Incompetence at its best cant fix it sell it?
Imran Khan mentioned million times, make a board and give it to them to fix.
Now Railway going same way, sell that one too...
What a shame
This is not a good move.
National assets cannot be sold like this that some one else should have 26% piece of cake toneat and rest of the cake is left with the same old corrupt people to eat.
The best course of action would have been if the Prime Minister have ordered for plugging the holes from where the money is draining.
Anyways, since this a matter related to the national carrier, the PM should have also considered the prose and cons of having previously sold national assets to private companies e.g. KESC and others, who could not deliver the required quantity of electricity for Karachiites, even after many many years of privatization and poor Karachiites are still facing severe load-shedding, irrespective of the weather, whether it is summer or winter.
The same situation PIA is going to face after its 26% partial privatization, but by then the action would become irreversible, similar to KESC in Karachi.
I would request PM to give a second thought that PIA should not be sold in peace meals and instead serious efforts should be made by changing the entire top brass of PIA and motivating PIA employees to deliver in a proper way, so that national carrier should prosper.
The success of PIA "Public-Private" Partnership with private sector oversight like the NCHD - PHDF model set in 2002 will become a model for doing same with other huge resource eating government institutions of Pakistan. Maybe debt free Pakistan will start becoming visible on te horizon.
Pl privatize it 100 %.. It will improve the quality of airlines,save money for the nation.Not only P.I.a, privatize all state enterprizes including steel mill,wapda which are white elephants.Only then the nation can progress
Excellent decision but PIA will become great again very quickly if management, hiring and firing, accountability and major decisions are empowered to the "Private" sector.
Fantastic, well done PM ji!
Unless PIA is divested and privatized 100%, this mini step of 26% is not going to be of any help.
@Nadir:
A commercial enterprise needs to run like a commercial enterprise and by professional people who know the business.
Defence personnel however qualified they might be in their field do not have expertise to run a commercial business and hence privatization is the best option.
It may have difficulties at the beginning but if done correctly it will be bring excellent results.
Somebody please run and tell the cheif justice that a national asset is being sold. He should immediately put an end to this absurdity. It's a great opportunity for him to win the hearts of the nation before he retires. A great opportunity to make headlines. I am sure the CJ will understand the real motive behind this move. Someone is going to make money. What if the airlines is making a loss. Let NAB get the looted money back to pay for the PIA losses. Not to mention the money the CJ squezed out pf the oil companies recently. By the way where is the new Chief of NAB. The last two were sent packing for not listening to the CJP. What will we do after he retires. Life will be very boring.
I commented elsewhere: PM is selling the airline... why he can't do this as I said below:
The only solution to revive PIA is to import a non national CEO, appoint him for 10 years and give him full authority to hire and fire, who should not listen to political or government instructions and just work as a professional for the best interest of company.
His authority and orders should be protected by law, shouldn’t be challenged in cheap courts and he should only report to Prime Minister of Pakistan.
ok..not 10 years give at least 5 years... bring a good gentleman who got experience on Middle East Airline.
If Emirates takes over, it will be first time in history that the airline which started it's operation and Emirates Airline by borrowing Jets from PIA, takes over PIA. LOL
Great decision! Pakistan needs to privatize other state-owned enterprises too. Its not government's business to be in business. And anyways, national assets must not be treated as personal assets of Jiyalas or Sathis or other Karkunan.
This is the only way of stopping corruption and improving services in govt owned corporate. Otherwise successive Governments have and will use them to recruit their party loyalists.
All the Banks before privatization were in similar condition. Banks service and Balance sheet shows now it was the right path.
A complete privatisation is not in the interest of Pakistan, a partial privatisation, with the state owning 51% of the company and private parties owning 49%, will ensure that transparency and good goverance is brought back in company while at the same time it remains a national asset. Just like how state companies are run in Singapore.
Oh my God a person can mange very well his 2.5 billion dollar assets GROWING RAPIDY but can not manage just one state entity going in loss which is PIA?
GOOD MOVE !! I hope privatization is not sabotaged by strikes of pia employees nd their political parents.
Perfect! Only privatization can turn these white elephants around. KESC a great example of the same
Love it. Keep going Mian Sb. We are with you.
Encouraging decision...Let see how it goes...
a very good move to get rid of sore organs of state that are malfunctioning and causing huge burden on state exchequer. As far as the transparency is concerned that is a joke, non-transparency is a success story of our bureacrats, civil servants, politicians and crooks.
Excellent and the right decission..............well done Nawaz Sharif.
PIA is a strategic asset run by the disciplined officers of the Defence ministry. It is only because of interference of civilians that it runs losses.