PIA issue: PM’s aide resisting Privatisation Commission’s role

Matter unresolved despite premier’s intervention.

ISLAMABAD:

In a move that could jeopardise plans to revive and sell the bleeding Pakistan International Airlines, the Prime Minister’s chief aide on aviation is opposing the government’s privatisation bid while flouting a law in resisting any role for Privatisation Commission (PC) in the national carrier. 

Shujaat Azeem, Special Assistant to Prime Minister on Aviation, has been denying all administrative and financial role of the PC in restructuring, according to sources in the Ministry of Finance and Privatisation.

The opposition to privatisation of PIA from within the government comes at a time when the ruling party is already struggling to cope with resistance offered by the Pakistan Peoples Party while simultaneously trying to overcome obstacles in the hiring of a financial adviser for PIA.

Under the Privatisation Ordinance of 2000, any entity cleared for privatisation by the Cabinet has to fall under the administrative and financial ambit of the PC. Under the same law, the affairs of Pakistan Steel Mills have been handed over to the PC by the Economic Coordination Committee of the Cabinet.

Under the $6.7-billion International Monetary Fund (IMF) programme, the government is bound to sell 26% shares of the PIA to a strategic investor by December 2014 – a deadline already extended by six months. The deadline to hire a financial adviser for PIA has also been missed twice. The Board of the Privatisation Commission is expected to make the announcement on Tuesday.

Sources said Prime Minister Nawaz Sharif himself tried to resolve the differences between his two aides last month but Azeem was not ready to budge. The meeting had been attended by Azeem, Muhammad Zubair and Finance and Privatisation Minister Ishaq Dar.  The rules of the game have yet to be devised, they added

The sources said another meeting was expected on the issue this week on the role of the PC in PIA’s privatisation. The issue of denying the due role to PC by the PIA management also came under discussion in an ECC meeting and Dar had grilled the management but to no avail.

Sources added that to begin with, Azeem was not keen on privatisation and wanted to restructure the entity — that too without involvement of the PC. The affairs of the PIA were going from bad to worse, as nepotism was still at its peak in the PIA, sources added. According to media reports, against 11 posts, there were 18 directors working without care for financial constraints.

On the issue of taking aircraft on lease, the PC was not involved in the exercise. Even Azam Saigol, the director on PIA Board, resigned last week on the same issue.

Azeem was not available for comments.

What the Ordinance says

According to clause 5 of the Ordinance of 2000, “The PC will take operational decisions on matters pertaining to privatisation, restructuring, deregulation, regulatory issues including approval of licencing and tariff rules and other related issues pertaining to the privatisation programme approved by the Cabinet”. The PC will issue directions and instructions to the management of a business undertaking on all major important administrative, financial, reporting and policy matters.

”Restructuring of an entity selected to be privatised is the responsibility of the PC and the management of the entity is responsible to implement the decisions,” said Zubair while talking to The Express Tribune. Zubair said if the line ministry was not performing its due role, even then responsibility of failing to achieve a privatisation target would eventually fall on the shoulders of the PC head.

Zubair said the PC was also needed to be administratively strengthened to perform restructuring functions and a Restructuring Cell in the PC is proposed to be setup.

Published in The Express Tribune, April 22^nd, 2014.

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