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ISLAMABAD: In the wake of expected another Rs60 billion losses to the national flag carrier Pakistan International Airlines (PIA) in the next two years with the existing status quo, the government is left with no other option but to make a viable revival plan till June 2018, which will be submitted to Prime Minister Nawaz Sharif for final approval within next two weeks.
The government has decided to abandon privatisation plan for PIA for next 18 months till June 2018 keeping in view political difficulties attached with execution of privatisation. However, with the status quo the national flag carrier would be facing Rs30 billion losses on per annum basis and the national exchequer would be bound to face accumulated loss of Rs60 billion in next two years. Total losses incurred by PIA had already close to Rs 200 billion.
According to official presentation given during the official meeting, the operational losses being faced by the PIA stood at Rs18 billion on per annum and by adding all other losses this national flag carrier was going to face loss of Rs30 billion on annual basis. “So the status quo provides no solution in the context of acute financial cost,” said one top official of the government while talking to The News here on Tuesday.
The ECC in its meeting held on January 18, 2017 under the chairmanship of Finance Minister had formed committee headed by Federal Minister for Planning Ahsan Iqbal and comprising of Mohammad Zubair, Chairman Privatization Commission, Haroon Akhtar Khan, Special Assistant to Prime Minister on Revenue, Tariq Bajwa, Secretary EAD, and Irfan Elahi, Acting Chairman PIA / Secretary Aviation Division, to finalise a business plan for improving the financial and operational performance of Pakistan International Airlines Company Limited (PIACL) on a sustainable basis, in coordination with the PIA management.
When contacted to Federal Minister for Planning Ahsan Iqbal for seeking his comments, he said that without ownership of 17,000 employees of the PIA the revival plan would not be succeeded so everyone would have to play its role. He said that the piecemeal approach would not work so it was decided to present detailed revival plan till February 2017 which would be submitted to PM for getting final approval.
The committee held its first meeting last week in which startling disclosures were made during the meeting. The sources said that the Chairman Privatization Commission Mohammad Zubair told the meeting that the PC was not taking into confidence. He explained the PC that the PIA could be divided into two companies in order to clean balance sheet after which it was expected some potential buyer would be interested to procure the PIA.
The fundamentals of the PIA were in shambles as it was considered as rudderless ship and its loans and obligations made it difficult for them to purchase spare parts which resulted into ensuring running PIA in efficient manner. After heated debate, finally, it was unanimous decision among the participants of the meeting to abandon the privatization plan for PIA and then come up with viable plan to revive it.
The committee directed the PIA management and its board to come up with their plan and present it before the committee headed by Ahsan Iqbal on upcoming meeting scheduled to be held on January 26, 2017 here in Islamabad.
“Without improving its financial health and perception image, the PIA cannot be revived,” said the official and added that the committee decided to take matters in its own hands as the PIA was in complete lurch, having no direction and heading towards complete collapse.
The committee, the sources said, wants to accomplish its assigned task within next two weeks after which they will take the Finance Minister Ishaq Dar into confidence and then table its revival plan before the PM for final approval.
In a separate summit, Federal Minister for Finance Senator Mohammad Ishaq Dar chaired a meeting to review matters related to Privatization here at the Ministry of Finance on Tuesday.
Chairman Privatization Commission, Mohammad Zubair, briefed the minister on the status of the ongoing privatization transactions. He apprised the minister on the status of various state-owned entities including Pakistan Steel Mills and SME Bank
Finance Minister emphasized that the government’s utmost priority with respect to privatization is to ensure that transactions are conducted in an open, fair and transparent manner. He said the government is actively working to resolve the financial bleeding caused to the national exchequer by loss-making state-owned enterprises. He stated that the government makes a decision regarding the restructuring or privatization of each loss-making entity on a case-by-case basis while keeping in view the specific circumstances of each entity, and in the best interests of the people of Pakistan. He urged the Privatization Commission to complete the ongoing transactions in a timely manner whilst ensuring full compliance with the applicable laws and regulations.
The meeting was attended by senior officials of the Ministry of Finance and Privatization Commission.
The government has decided to abandon privatisation plan for PIA for next 18 months till June 2018 keeping in view political difficulties attached with execution of privatisation. However, with the status quo the national flag carrier would be facing Rs30 billion losses on per annum basis and the national exchequer would be bound to face accumulated loss of Rs60 billion in next two years. Total losses incurred by PIA had already close to Rs 200 billion.
According to official presentation given during the official meeting, the operational losses being faced by the PIA stood at Rs18 billion on per annum and by adding all other losses this national flag carrier was going to face loss of Rs30 billion on annual basis. “So the status quo provides no solution in the context of acute financial cost,” said one top official of the government while talking to The News here on Tuesday.
The ECC in its meeting held on January 18, 2017 under the chairmanship of Finance Minister had formed committee headed by Federal Minister for Planning Ahsan Iqbal and comprising of Mohammad Zubair, Chairman Privatization Commission, Haroon Akhtar Khan, Special Assistant to Prime Minister on Revenue, Tariq Bajwa, Secretary EAD, and Irfan Elahi, Acting Chairman PIA / Secretary Aviation Division, to finalise a business plan for improving the financial and operational performance of Pakistan International Airlines Company Limited (PIACL) on a sustainable basis, in coordination with the PIA management.
When contacted to Federal Minister for Planning Ahsan Iqbal for seeking his comments, he said that without ownership of 17,000 employees of the PIA the revival plan would not be succeeded so everyone would have to play its role. He said that the piecemeal approach would not work so it was decided to present detailed revival plan till February 2017 which would be submitted to PM for getting final approval.
The committee held its first meeting last week in which startling disclosures were made during the meeting. The sources said that the Chairman Privatization Commission Mohammad Zubair told the meeting that the PC was not taking into confidence. He explained the PC that the PIA could be divided into two companies in order to clean balance sheet after which it was expected some potential buyer would be interested to procure the PIA.
The fundamentals of the PIA were in shambles as it was considered as rudderless ship and its loans and obligations made it difficult for them to purchase spare parts which resulted into ensuring running PIA in efficient manner. After heated debate, finally, it was unanimous decision among the participants of the meeting to abandon the privatization plan for PIA and then come up with viable plan to revive it.
The committee directed the PIA management and its board to come up with their plan and present it before the committee headed by Ahsan Iqbal on upcoming meeting scheduled to be held on January 26, 2017 here in Islamabad.
“Without improving its financial health and perception image, the PIA cannot be revived,” said the official and added that the committee decided to take matters in its own hands as the PIA was in complete lurch, having no direction and heading towards complete collapse.
The committee, the sources said, wants to accomplish its assigned task within next two weeks after which they will take the Finance Minister Ishaq Dar into confidence and then table its revival plan before the PM for final approval.
In a separate summit, Federal Minister for Finance Senator Mohammad Ishaq Dar chaired a meeting to review matters related to Privatization here at the Ministry of Finance on Tuesday.
Chairman Privatization Commission, Mohammad Zubair, briefed the minister on the status of the ongoing privatization transactions. He apprised the minister on the status of various state-owned entities including Pakistan Steel Mills and SME Bank
Finance Minister emphasized that the government’s utmost priority with respect to privatization is to ensure that transactions are conducted in an open, fair and transparent manner. He said the government is actively working to resolve the financial bleeding caused to the national exchequer by loss-making state-owned enterprises. He stated that the government makes a decision regarding the restructuring or privatization of each loss-making entity on a case-by-case basis while keeping in view the specific circumstances of each entity, and in the best interests of the people of Pakistan. He urged the Privatization Commission to complete the ongoing transactions in a timely manner whilst ensuring full compliance with the applicable laws and regulations.
The meeting was attended by senior officials of the Ministry of Finance and Privatization Commission.
570 Million USD (60 billion rupee) , is rather big Claim , were they not running a operational airline last 2 years
