ISLAMABAD: The Senate’s Standing Committee on Privatisation has opposed the plan to privatise the Pakistan International Airlines (PIA) before the government’s term expires in May.

Divesting PIA in haste would create problems for the next government to implement the decision, Mohsin Aziz, head of committee, advised the government on Tuesday.

Saleem Mandviwalla of the PPP bitterly criticised the government’s plan and said his party would strongly resist the privatisation of the national flag carrier at this stage when the government is approaching the end of its term.

Law requires move towards privatisation, Mr Aziz responds to senators

He was of the view that the privatisation must be on hold as possible buyers would lack confidence in the decision and it would become a burden on the next government to implement the decision.

On the contrary, Privatisation Minister Daniyal Aziz explained to the committee that the government was following the PIA Corporation (Conversion) Act of 2016, approved by the parliament in 2016. He said under the law the government is required to carve out the non air transport business of the airline by April this year, then carry out a valuation of the air transport business component. After these two steps are complete, the government can move towards sale of 49pc shares.

Mr Aziz informed the committee that the national flag carrier was facing accumulated losses of Rs350 billion while the government was providing Rs380 million for Pakistan Steel Mills (PSM) to pay salaries of the employees. If PIA and PSM are privatised, the government should be able to divert about Rs6bn to each district of the country to meet the social sector needs, he said.

He further informed the committee that about 68 sick state-owned entities were swallowing over Rs650bn annually which could have been spent on the provision of health, education and infrastructure building for the socio-economic uplift of the country.

The commission was currently working on the privatisation of SME bank and Mari Petroleum in addition to PIA and PSM, he added.

The standing committee members were given a comprehensive briefing on the proposed privatisation of PSM and the fate of its employees. Steel mills currently have 11,500 employees with a total of Rs188bn liabilities. The transaction model, approved by the board of the commission, will be a 30-year lease plan of the plant and core land of the PSM, the committee was told.

Published in Dawn, January 31st, 2018