By Staff Reporter
ISLAMABAD: Pakistan will hire a financial adviser to draft a plan to privatise its money-losing national airline, as part of its fiscal discipline agreement with the International Monetary Fund (IMF).
The caretaker government’s Privatization Minister Fawad Hasan Fawad said on Tuesday that the appointment will probably be finalised on Wednesday, as the country’s ailing $350 billion economy could not afford further delays.
“We’re trying our best to keep the PIA flying,” Fawad said, referring to Pakistan International Airline, a state-owned enterprise that has accumulated over Rs713 billion in losses as of June 2023. “No financial institution in the country has got any appetite to loan any more money to the PIA.”
The former coalition government said in August that PIA will be privatised together with the outsourcing of operations at three major airports. The privatisation of PIA comes after Pakistan agreed to devise a policy on such loss-making entities as part of its $3 billion IMF bailout in July to avert a sovereign debt default.
“The financial adviser’s report will enable the government to take a final decision,” Fawad said. “The core business of the PIA would be offered to potential buyers with current liabilities and assets with the vetting of the federal cabinet.”
Fawad said that based on a study conducted in 2017 on the privatization of PIA, the financial adviser would give a proposal to restructure PIA leading to its privatization with or without a government sovereign guarantee. The final proposal pertaining to the PIA will be submitted to the cabinet for a decision, however, only core business will be offered to private operators.
He said the financial adviser would also give the proposal for employees working in PIA.
The minister said the airline was recording yearly losses of about Rs156 billion, adding that 15 aircraft, including six on lease, out of a fleet of 34 were grounded due to financial constraints. The airline had recorded losses of about Rs21 billion in the third quarter of 2023, he said.
“We’re not in a position to bear it anymore,” he said.
Fawad also said that the privatization commission extended the date for submission of the request for proposal (RFP) from a potential firm for the position of a financial adviser for the lease of Roosevelt Hotel, New York City, USA from October 8, 2023, to November 6.
It has been observed that 30 percent of business places are vacated where the hotel is located due to the work-from-home concept introduced after Covid-19, he added.
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