- No such deadline for privatisation
- A board meeting will be held tomorrow to review the financial adviser appointment
- PIA crossed Rs17b of credit line given by the PSO
There was no such requirement that privatisation was only possible with the consensus of political parties under the legislation in the field, caretaker Privatization Minister Fawad Hasan Fawad has said.
“I say it with complete responsibility,” he said in an interview with Asma Shirazi on her show Faisla Aap Ka which was aired on Aaj News on Thursday. “Secondly, we have options that either we shut down the airline or privatise it and keep it alive by selling some of its parts.”
He was asked about the PPP’s objection to the decision that the Pakistan International Airlines would go under the hammer in the interim government period and the political parties’ nod needed for the decision.
In July this year, a joint session of the Parliament passed amendments to the Election Act 2017, granting the caretaker government powers to take actions or decisions regarding existing bilateral or multilateral agreements and projects.
Fawad added that political parties including the PPP would agree on saving the airline rather than grounding an airline on which the country has invested so much over the last 75 years.
On the same wavelength, he said that there was no space for incurring the expenses of the national flag carrier at a time when it was difficult for the country to meet daily expenses.
When pressed on the prerogative of the caretaker government, he replied that there was no such thing and added that there was only one obstacle to the interim setup’s domain: it cannot add any institution to the privatisation list on its own.
“But the caretaker government has complete right to continue and complete the process of privatisation of the institutions which are on the list of privatisation,” Fawad said and added that they have the mandate for it.
He went on to add that the government has to not breach any legal requirement in the process.
While responding to PPP leader Raza Rabbani’s objection, Fawad said that the coalition government through legislation gave the right to the interim government to not just complete the process but also sign multilateral agreements.
“In the past, the caretaker governments were entitled to this,” he said reminded that the interim setup of 2018 was not able to finalise the IMF agreement due to its domain.
The minister assured the PPP leader that he would not do anything which was against the law.
In the first segment of the show, Fawad said that there was no such deadline for privatisation of the national flag carrier.
He went on to add that the PIA has Rs711 billion worth of accumulated losses, saying that the airline has to pay RS430 billion to banks and over Rs370 to vendors. The ministry has a December 31 deadline to complete the final audit of the accounts.
Fawad explained that the ministry has to ensure that the asset and liabilities book was cleared by December. Moreover, the government has completed the technical evaluation for the appointment of the adviser in order to make proposals to prepare plans for the task.
The board meeting would be held on Friday where the commission would seek approval after the financial evaluation.
Earlier this week, The Express Tribune reported that eight companies, including three among the top 20 financial advisory firms, have responded to Pakistan’s request for a proposal to prepare plans for privatisation and bifurcation of the PIA into good and bad entities.
The financial adviser – who would be part of the Pakistan International Airline Corporation Limited –would start work in two phases: separate aviation assets and the rest of assets and liabilities would be in a Holdco structure.
The evaluations of the operations would take nine weeks, saying that the PIA has landing slots in the United Arab Emirates, Kingdom of Saudi Arabia, USA, and the UK.
According to Fawad, the cabinet would decide whether to have an open bid or not.
When asked, he said that Pakistan State Oil had given Rs15 billion worth of credit line to the PIA that was later extended by Rs2 billion. Fawad said that the PIA breached both credit lines.
“Investors will buy PIA after seeing its potential. We will try to lessen the governance cost,” Fawad said.
He shared that the First Women Bank and the House Building Finance Company were on the list of privatisation.
“I think if we do our work fine then no one will interfere,” the minister said.