ISLAMABAD – The federal cabinet approved the restructuring of Pakistan International Airlines (PIA), days after the Election Commission of Pakistan (ECP) halted its privatization.
In a meeting of the federal cabinet held on Tuesday, it was decided to segregate the national carrier into two entities named TopCo and HoldCo.
The split is being done on the recommendations of the Financial Adviser overseeing the privatization of the airline who has submitted recommendations and a comprehensive report in this regard.
As per the details available, PIA’s basic operations, engineering, ground handling, cargo, flight kitchen, and training would be dealt with by the TopCo entity while the HoldCo would manage Precision Engineering Complex, PIA Investment Limited and other subsidiaries and assets of the airline.
The members of the caretaker federal cabinet were informed that through this division of the carrier, investors would be attracted. Meanwhile, the Cabinet Committee on Privatization was also tasked to wind up negotiations regarding the liabilities of the airline.
The decisions come days after the Election Commission of Pakistan requested the provision of all relevant documentation pertaining to the comprehensive privatization program of PIA, while highlighting the mandate of the caretaker government as enshrined in the constitution.
The calls for privatizing the airline were made during the previous regime and the follow-up deliberations led to the hiring of a financial adviser. Earlier, the privatization ministry promulgated the Privatisation Ordinance to remove the role of high courts in privatization transactions aimed at avoiding legal hitches.
The state-owned Pakistan International Airlines has been under fire for denting a severe blow to the national exchequer and facing hiccups due to multiple factors. Time and again, the Federal Board of Revenue (FBR) freezes its accounts while Pakistan State Oil (PSO) also refuses to supply oil to the carrier.
The airline recently settled a dispute with an Indonesian firm and got possession of one of its aircraft though the airline failed to prove itself sustainable in the long term which has forced the policymakers to finally do away with it and hand it over to a private investor.
Though efforts are being ramped it, it is still expected that the privatisation process would take a few weeks or maybe months.
