In response to the crisis, PM directs PIA to accelerate privatisation

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The caretaker Prime Minister Anwaar-ul-Haq Kakar on Monday directed the authorities concerned to expedite the process of privatising Pakistan International Airlines (PIA) in the wake of the deepening financial crisis that the company is facing.

In recent weeks, the flight operations of the Philippine International Airlines have been severely affected by the unavailability of fuel amid the current economic crunch that the national carrier is experiencing, with numerous flights being cancelled as a result.

The Pakistan State Oil (PSO), which supplies fuel to the Pakistan International Airlines (PIA), has cut fuel supplies to the airline on Sunday (yesterday), resulting in as many as 26 flights being cancelled from Karachi, Lahore, Islamabad, Quetta, Bahawalpur, Multan, Gwadar, and other cities.

In an attempt to end PIA’s financial crisis, the prime minister chaired a meeting to discuss the issue, during which he stressed the need to conclude the privatisation process within the specified period of time.

There is no doubt that PM Kakar is looking forward to receiving regular compliance reports regarding this matter.

In his remarks, he said that until the privatization of PIA has been completed, the government would continue to give the airline support. The minister said that the national exchequer would be saved if the state-owned enterprises (SOEs) which are facing financial losses were privatized.

PIA’s financial situation was explained to the premier as part of a briefing.

PIA was placed on the list of active privatisations by the Cabinet Committee on Privatisation (CCoP) in August 2023 after an amendment approved by parliament. The Committee also granted its approval to hire a financial adviser to assist in the transaction of PIA’s Roosevelt Hotel in New York City.

The Public Insurance Agency of India is reported to have been converted from a corporation to a company which is registered under the Companies Ordinance, 1984, according to top official sources.

Consequently, PIAC was converted into a public limited company, namely Pakistan International Airlines Corporation Limited (PIACL), through the implementation of the PIAC (Conversion) Act, 2016, which was passed by the joint session of parliament in 2016.

Nevertheless, one of the major amendments in this Act was incorporated by parliament into the said Act, namely an explanation in section 4 of subsection 4, which restricted the federal government from transferring management control of PIACL’s airline business while retaining at least 51% of the shares in such entity.

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