ISLAMABAD, Aug 5: Pakistan is willing to withdraw a $16 million compensation claim against Iraq with the United Nations special committee on compensations provided Baghdad agrees to settle the issue on a bilateral basis.

This has been communicated to the Iraqi government on bilateral ministerial level, official sources told Dawn.

The compensation claim was lodged by Pakistan International Airlines (PIA) with the UN compensation committee against the Iraq Airways for damages on account of the Gulf War, sources said.

They said that Commerce Minister Abdul Razak Dawood during the February 2000 joint ministerial committee meeting in Baghdad was informed by the Iraqi government that it considered the claim as an “unfriendly act” and it wanted to resolve the matter bilaterally.

Baghdad also challenged the compensation figure of $16 million and wanted it reviewed.

As a result of prodding by the government, the PIA board of directors agreed to withdraw the claim provided Iraq agreed to a bilateral compensation of $1.4 million.

The decision was conveyed to the Iraqi minister for transport but Iraq Airways wanted more details and justification for the $1.4 million being demanded and the matter could not proceed amicably.

Pakistan has now informed the Iraqi government at the top level that on the political level it has done whatever was possible and nothing more could be done on the government level.

The government has also asked Baghdad to arrange technical meetings between the airlines to agree on a compensation figure and resolve the matter.