Caretaker Government Making Binding Plan for Next Government to Sell PIA

[Abbas Ali]

Caretaker administration is making binding plans for a new Government of Pakistan to sell loss-making Pakistan International Airlines (PIA).

Pakistan, in deep economic crisis, agreed in June to overhaul loss-making state-owned enterprises under a deal with the International Monetary Fund (IMF) for a $3-billion bailout.

The government decided to privatize PIA just weeks after signing the IMF agreement.

“Our job is 98% done,” Privatization Minister Fawad Hasan Fawad told Reuters when asked about the plan to sell the airline. “The remaining 2% is just to bring it on an excel sheet after the cabinet approves it.”

Fawad said the plan, drawn up by transaction adviser Ernst & Young, will be presented to the cabinet for approval before the tenure of the administration ends following the election. The cabinet will also decide whether to sell the stake by tender or through a government-to-government deal, Fawad said.

“What we have done in just four months is what past governments have been trying to do for over a decade,” Fawad said. “There is no looking back.”

Two sources close to the process told Reuters that a 51% stake with full management control would be offered to buyers after parking the airline’s debts in a separate entity, under the 1,100 page report from Ernst & Young.

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