News Analysis |
Days after the federal privatisation minister claimed that the government is committed to selling off the core business of Pakistan International Airlines (PIA) before April 15th, Adviser to the Prime Minister on Aviation Sardar Mehtab Abbasi ruled out any possibility of the national flag carrier’s privatization before elections.
Presenting a report before the Senate on PIA’s progress, Abbasi said finalising the privatisation of the airlines during the tenure of the incumbent government was quite impossible. He said he was not seeing any serious effort on the part of the government to privatise PIA.
“The government is about to complete its tenure, whereas it is quite impossible to complete the process of privatisation within [the] next two months as the process takes years to be completed,” he elaborated. The adviser said the PIA employees and administration were striving hard to restore the airline’s past glory.
Despite some initial success, the process stalled in 2016 after staff protests caused havoc with PIA operations and the government passed a law that effectively made it impossible to privatise the airline.
“The PIA administration has been told not to accept any external pressure,” he said, without elaborating. He added that the issue of PIA’s privatisation has created unrest among the employees. He further said that PIA is a commercial company and commercial institutions follow their own rules and regulations.
Last year, speaking before the Senate Special Committee on the performance of PIA, Sardar Mehtab Abbasi had asked the Senate to shut down PIA: “Such a recommendation from a parliamentary committee will help the government take the difficult decision that it is otherwise hesitating to take.”
Read more: PIA confused between Emirates and Etihad privatization offers
Mr. Abbasi laid three options before the committee: letting the national flag carrier run the way it was, operating in loss; declare it bankrupt and shut it down; or, restructure it. “We are trying to restructure PIA, but it is an extremely difficult task,” he said, arguing that PIA lacked discipline, top-quality management, ethical and professional officers and a “sense of ownership”.
PIA was among 68 state-owned companies earmarked for privatisation in return for a $6.7 billion International Monetary Fund package that helped the government stave off a default in 2013.
However, committee chairman Mushahidullah Khan, who belongs to the ruling Pakistan Muslim League-Nawaz (PML-N), had said the body was not in favour of shutting down PIA altogether. “We believe that a few good officers at the top could restore PIA’s lost glory,” he said, to which Mr Abbasi had retorted: “Top quality people do not come to PIA anymore.”
In counter rhetoric, Minister for Privatisation Daniyal Aziz announced earlier this month that the government is determined to finalise the privatisation of Pakistan International Airlines’ “core business” by April 15th. The minister’s statement, contradictory to the advisor, had come a day after his interview to an international news agency, in which he said that the federal government would try to privatize Pakistan International Airlines (PIA) before the general elections this year.
Read more: PIA to cash in on CPEC by announcing flights to Gwadar
In a press conference in Islamabad, the minister said that the private sector runs airlines in several countries of the world, adding that the state-owned airlines across the globe are generally in loss. Aziz said that the privatization of the national air carrier will be completed by April 15th, 2018. It will be ensured that the rights of the employees will be safeguarded, he said.
The government is trying to make the balance sheet of PIA positive from negative, said Daniyal Aziz. When big industries go into loss then it affects the economy, said Aziz, adding that saving those industries without foreign investment is inevitable.
“Privatisation of airlines creates environment of competitiveness,” Aziz said, adding that several airlines in the world, which emerged after the formation of the PIA, turned out to be far more successful. “We also want to maintain the national identity of PIA,” he said.
The government is trying to make the balance sheet of PIA positive from negative, said Daniyal Aziz. When big industries go into loss then it affects the economy, said Aziz, adding that saving those industries without foreign investment is inevitable. According to a foreign news agency report, PIA has been hit by management turmoil in recent years and a 2016 plane crash that led to 47 deaths.
Read more: New PIA chief’s optimism leaves people confused
PIA was among 68 state-owned companies earmarked for privatisation in return for a $6.7 billion International Monetary Fund package that helped the government stave off a default in 2013. Despite some initial success, the process stalled in 2016 after staff protests caused havoc with PIA operations and the government passed a law that effectively made it impossible to privatise the airline.