Pakistan caretaker government privatises PIA airline ahead of general election

Feb 7, 2024



New Delhi: In the final step before the upcoming elections, Pakistan's interim cabinet has approved restructuring Financially distressed national carrier, Pakistan International Airlines (PIA), as part of its strategy to privatize the airline, which has been facing losses for years. The caretaker government, just two days before the elections, decided to split PIA into two separate entities called Topco and Holdco, according to a statement after a cabinet meeting chaired by interim Prime Minister Anwarul Haq Kakar late on Tuesday night. Told in.
The restructuring plan involves handing over specific operations such as engineering, ground handling, flight kitchen and training to Topco, based on the recommendations of the financial advisor appointed for the purpose. Meanwhile, Holdco will be responsible for the management of entities such as the Precision Engineering Complex. PIA Investments Limited, and subordinate divisions and properties. The move is aimed at attracting investors to PIA and streamlining its operations.
Fawad Hassan Fawad, Minister Privatizationsubmitted the proposal, which emphasized that the divestment would create a favorable environment for investment in PIA. The Cabinet also directed resolution of disputes related to dues owed by PIA to government organizations while expediting the overall restructuring process.
Additionally, the Privatization Ministry's recommendation, which received Cabinet approval, included the privatization of First Woman Bank.
The decision to split PIA was intended to pave the way for its privatization; However, the timing posed challenges as the caretaker government was term limited, set to expire with the election of a new parliamentary leader on 8 February. Previous attempts by various governments to privatize PIA had faced political opposition due to concerns about the impact on thousands of people. of airline employees. The caretaker government was expected to act without fear of political consequences, but the process faced delays and the Election Commission of Pakistan intervened before substantial progress could be made.
Although the interim cabinet took an important decision to divest the national flag carrier, the ultimate fate of PIA and the implementation of its privatization plan will be at the discretion of the incoming government, which will present potential challenges in implementation.



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