Defence Minister Khawaja Asif on Wednesday said that the government was satisfied with the sale of the Pakistan International Airlines (PIA), adding that it had great “symbolic value”.
He expressed these views on Geo News programme ‘Geo Pakistan’ when asked whether the government was satisfied with the process.
“Yes, the government is satisfied. This is the first biggest transaction of our privatisation process. This transaction has a great symbolic value,“ he said, recalling that previously First Women Bank had also been privatised but that transaction was not as big.
A consortium led by the Arif Habib group won the auction for a controlling stake in Pakistan International Airlines Corporation Ltd (PIACL) on Tuesday with a bid of Rs135 billion after a competitive, televised process, marking the country’s first major privatisation in nearly two decades.
The sale is a central plank of the government’s plan to offload loss-making state-owned enterprises and a key condition under Pakistan’s $7bn International Monetary Fund bailout programme.
Speaking about the matter on ‘Geo Pakistan’, Asif said the PIA sale had “symbolic value because of the history of this transaction“.
Four years ago, he said, the country’s entire aviation sector had suffered following a statement by a then-minister from the PTI.
He was apparently referring to former aviation minister Ghulam Sarwar Khan’s statement in June 2020 during a parliamentary session. Khan had said investigations revealed that more than 262 of the country’s 860 active pilots either held fake licences or had cheated in their exams.
Following the then-minister’s statement, European and UK authorities had banned PIA from their territories, which were the airline’s most profitable routes. A number of foreign airlines had also grounded Pakistani-origin pilots over concerns about their licences.
The developments followed the crash of a PIA flight from Lahore near Karachi’s Jinnah International Airport in 2020, killing around 100 people.
Asif said these events had led to PIA going “almost bankrupt”, adding that the government then restructured the company. “The government itself owned a big portion of its liability and only nominal liability remained,“ he said. “Against this backdrop, yesterday’s transaction is a very successful one.”
He also credited the civil aviation department for its considerable contribution in the matter and seeing the transaction through. “We went through a painstaking process,” he said, adding that PIA was now operating flights to Manchester.
The minister further stated that the airline now also had permission to operate flights to Birmingham and London, but it did not have aircraft for those flights. Similarly, he continued, PIA now also had permission to operate flights to New York and around 14-15 destinations in Europe.
The defence minister also appeared to be defending the arrangement under which the government is to receive just 7.5 per cent — around Rs10bn — of the amount from the PIA sale, saying that investing a “bigger portion” back into the airline increased its value.
He said the government still held 25pc of PIA’s shares and 92.5 of the amount from the sale being invested back into the airline was actually an investment into a national asset.
“We did give a handout to anyone,” he asserted, adding that the country had borne losses for 50-55 years following nationalisation of businesses.
He also blamed the bureaucracy for state-owned enterprises’ losses, adding that politicians likely shared some responsibility for these losses as well.
“We have to construct such transactions [as that of PIA‘s sale] to rid [the national exchequer] of these losses. We don’t have a choice. We are beggars, not the choosers,” Asif said, adding that several other transactions were to be carried out in the future.
In this connection, he also mentioned that two power distribution companies in Sindh and one each in Khyber Pakhtunkhwa and Balochistan were facing severe losses.
When the anchorperson pointed out that Asif had held Khan responsible for losses in the aviation sector in recent years and asked whether action would be taken over such matters, Asif said action would be taken.
“There is no other option. These people should be held answerable,” he said.
He said often retired bureaucrats would become part of boards of state-owned enterprises and earn in millions.
“This is an orgy of loot and plunder of the public sector that has been going on in our country for the past 55 years,” he commented. “The existence of a sick public sector is actually supported or pushed by the bureaucracy […] The government is largely responsible for it, and they [bureaucrats] are the major beneficiaries of this loot and plunder.”
Asked about over-staffing in PIA, he said even if a little more had to be paid to the employees than the actual payable amount to “get rid of them”, then it should be paid.
“Because the purpose should be to stop the continuous bleeding.”
More to follow
