ISLAMABAD: Caretaker Minister for Privatisation Fawad Hasan Fawad said on Tuesday the government was taking forward the privatisation process in a transparent manner and, at the same time ensuring the protection of public interest.
Addressing a news conference along with Information Minister Murtaza Solangi, he stressed the importance of privatising loss-making state-owned enterprises (SOEs) to enable them to compete effectively in the global economy.
The minister said the government wanted to privatise Pakistan International Airlines in order to bolster the country’s aviation industry and to make Pakistan a regional hub.
Regarding Pakistan Steel Mills (PSM), the minister indicated that the government planned to place the matter before a meeting of the federal cabinet.
Fawad says PIA’s losses amounted to Rs713 billion at end of June this year
“A robust regulatory control regime will be in place to safeguard public interest throughout the [privatisation] process,” Mr Fawad added.
He expressed regret over the past governments’ failure to address the country’s economic challenges, recalling that the privatisation process had begun in 1994, but some cases were still under litigation.
The minister reaffirmed the caretaker setup’s “commitment to fulfilling the responsibilities entrusted to it” by the previous governments.
Mr Fawad disclosed that in 2020, SOEs had a major role in the deficit in the Gross Domestic Product (GDP). Fifteen major entities had incurred losses amounting to Rs 2 trillion, he added.
The government had to spare a staggering Rs 2.54tr to support loss-making SOEs between 2018 and 2022, highlighting the magnitude of the problem by saying the amount could have been allocated to advance projects like the Bhasha Dam.
By the end of June this year, PIA’s losses amounted to Rs713 billion, Rs263 billion of which consisted of debt, Mr Fawad said.
An additional Rs13bn was provided by banks on government guarantee, he added. The government provided Rs150 billion from its own resources as well.
The minister said another objective of the airline’s privatisation was to utilise its potential and to avoid unbearable losses to the exchequer, which stood at Rs12.7bn per month.
He said the Privatisation Commission had suggested the appointment of a single-transaction adviser, for which approval would be obtained from the federal cabinet on the basis of a report prepared in 2017.
“Efforts are being made to resume PIA flight operations for Europe as soon as possible,” the minister said.
A team of experts was expected to visit Pakistan in December or January for reviewing flight safety and security standards.
He said Pakistani pilots were highly skilled and capable of landing and taking off in difficult areas. “Our engineers and supporting staff are up to the international standards.”
The PIA fleet consists of 34 aircraft, out of which 15 are grounded, including six leased ones. Their accumulated losses were recorded at $2 million.
Published in Dawn, October 11th, 2023
