ISLAMABAD: Amid strong criticism by senators, two divisions of the federal ministry headed by Senator Ishaq Dar (privatisation and finance wings) on Thursday provided divergent information to a Senate committee about the proposed privatisation of Pakistan International Airlines (PIA).
A meeting of the Senate’s Standing Committee on Finance, Revenue, Privatisation and Statistics headed by Senator Nasreen Jalil of MQM was informed by Finance Secretary Dr Waqar Masood Khan that the government was required to appoint a financial adviser for the privatisation of PIA by March-end under an agreement with the International Monetary Fund (IMF). As part of the $6.64 billion bailout package, the government was also required to privatise 26 per cent shares of the company to a strategic partner by December this year, said Dr Khan, adding that the company’s accumulated losses had crossed Rs180 billion.
Privatisation Secretary Amjad Ali Khan, however, told the same meeting that the IMF benchmarks regarding dates and the number of shares to be sold were not sacrosanct. He said they could be changed and would depend on the report of the financial adviser.
He said the entire process of PIA’s privatisation would be firmed up depending on the advice of the financial adviser who is expected to be appointed in March this year. “It would be the report of the financial adviser which will determine if privatisation could be done in 2014 or will be delayed for two years,” he said.
The adviser’s report would suggest if the restructuring process could be completed in two to three years to make the entity viable for sale and to attract the best possible price.
The secretary added that even sale of 26 per cent shares was not sacrosanct and the number of shares could be increased or decreased.
On criticism from the PPP and MQM senators over the sale of public sector entities, Dr Khan said the sale process would take place in accordance with the law and the present government had decided to proceed with the sale of 65 entities approved by the Council of Common Interests (CCI) under the previous government.
He said the privatisation board had been constituted that would meet on Jan 8 to formally kick-start the privatisation programme. He assured the committee that the government would not show any haste in selling PIA, adding that the previous Board of PIA had also stressed the need for a public-private partnership for the betterment of the national carrier.
The deputy manager of PIA said the management committee of the national carrier had not been consulted by the Privatisation Commission or the Ministry of Finance about the PIA’s privatisation plan.
Senators Fateh Mohammad Hassani and Islamuddin Shaikh expressed serious concerns over the government’s privatisation plan.
Mr Shaikh accused the federal government of trying to create law and order problems in Karachi by going for PIA’s privatisation through a pre-planned conspiracy.
The crux of their criticism was that the government was moving into the ‘wholesale mode’ to benefit a particular group. But, they said they would not let this happen.
Senator Kulsoom Parveen said it appeared that the government had already decided to whom the PIA would be given.
Sughra Imam asked the senior officials about the justification to privatise profit-making entities and claimed that the government had already decided to sell PIA to the Hariri family of Lebanon. She claimed that a person appointed by the prime minister as his adviser on aviation happened to be working for the Hariri family.
Committee’s chairperson Nasreen Jalil said the committee had serious reservations over the privatisation of PIA and that national assets should not be sold in a rush. She said the members of the committee were not against privatisation, but the government should take steps for protection of rights of employees, consult the committee for positive proposals and conduct the programme in a transparent manner.
She said the government should also take steps to transform loss-making entities into profitable organisations because the continuous sale process would take the nation to a stage when nothing would be in its own control.