KARACHI: The privatization plan for Pakistan International Airlines (PIA) in the upcoming year has encountered obstacles, with the privatization commission reportedly unable to address issues related to loan repayments and legal matters.
The interim federal minister for privatization, Fawad Hussain Fawad, allegedly faced difficulties in implementing the plan to transfer PIA to the private sector by January 2024.
The Ministry of Finance is expected to intervene to meet PIA’s financial requirements for the next three months. PIA has borrowed over Rs 270 billion from commercial banks with government guarantees.
Sources indicate that PIA may struggle to pay the Rs. 8 billion interest on the Rs. 260 billion loan. National Bank, Bank of Punjab, and eight other commercial banks are involved in lending to PIA.
The decision to reschedule government loans until the privatization of PIA remains pending and the Ministry of Finance will establish a committee to determine PIA’s financial needs.
In a related development, the financial affairs of PIA are likely to be handed over to the Privatisation Commission.
Sources suggest that the commission will take measures to reduce PIA’s losses, linking its financial affairs with the latest system to improve its balance sheet, ultimately facilitating privatization.
The administrative control of the institution will reportedly remain with PIA’s management, while administrative affairs will remain under the Ministry of Aviation. The Privatisation Commission aims to make the institution’s accounts transparent by December 31.
