At the tail end of its constitutional tenure, the PML-N government has decided a hasty privatization of Pakistan International Airline. As the National Airline is incurring heavy losses and has a debit liability over Rs. 200 billion, therefore potential buyers are not interested to buy stakes in this white elephant. The government is keen to sell out the air transport business within three months which has been categorized a core function of this corporation. The huge legacy loans, non-core assets and other liabilities will be put into another company which is estimated worth Rs.325 billion.
This announcement was made by Privatization Minister, Daniyal Aziz in a hurriedly called press conference on Monday. He said that Pakistan Airline Corporation Act 2016 empowers Privatization Commission to sell the National Airline. The Minister elucidated that that under this Act of the parliament the separation process of the core and non core functions has to be completed within two years of the enactment of the law and this deadline is going to end in April this year. Government of Pakistan agreed to the privatization of profitable and non-profitable state enterprises conditionality of International Monetary Fund loan program, the Extended Fund Facility of $ 6.6 billion. But could not do so because of the stiff resistance from opposition particularly Pakistan Peoples Party.
The successive civilian governments ruined the public sector organization by imposing inefficient and corrupt managements on them. Moreover, these corporations were overstaffed by political appointments. The budget deficit is Rs.14, 1 trillion, the bulk of which is caused by losses in PIA, Pakistan Steel Mill and Pakistan Petroleum Limited. Steel mill was making profit till 2007but in the first year of PPP third tenure it started incurring huge losses. The profit earning public sector entities are deliberately pushed into losses to prepare a ground for their sell out at throw away prices. It is a matter of record that former banker Prime Minister Shaukat Aziz attempted to sell the billions dollars worth Pakistan Steel Mill at $ 270 million, when it was making substantial amount of profits. However, on 23rd June, 2006, the Supreme Court Bench headed bench headed by former Chief Justice Iftikhar Muhammad Chaudhry struck down the privatization of Pakistan Steel Mill. This family silver was converted into loss incurring state enterprise in 2008. The cumulative losses of Pakistan Steel Mill have now reached well over Rs. 400 billion. Pakistan international Airline was one world’s reputed airlines. Its fast degeneration started in the PPP government 1988-90. The process of its degeneration got momentum in the first PML-N governments and its losses snowballed in the past 10 years. The major factors that contributed to the huge losses of the National Airline are appointments of corrupt and inefficient management, overstaffing and non-induction of new airplanes in its fleet. Expenditures on fuel, repairs and salaries went up enormously. The International Civil Aviation Organization (ICAO) imposed a ban on PIA flights on international routes because of its obsolete aircrafts and likely travel risks. The private Pakistani Airlines like Air Blue, Shaheen Airline Bhoja Airline took away the passengers who used to avail PIA service. The colossal amount of losses and legacy loans justifies the privatization of its dwindled air business. It remains to be seen how the government succeeds in this sell out for paltry amount.
