'Our Job Is 98% Done': Pak Minister Says Plan to Sell National Airline Near Complete Ahead of Polls

Pakistan’s caretaker government is preparing for the imminent sale of the loss-making Pakistan International Airlines (PIA) ahead of next week’s elections. “Our job is 98% done,” Privatisation 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.”

Previous governments have shied away from undertaking unpopular reforms, including the sale of the flag carrier. But 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 interim government decided to privatise PIA just weeks after signing the IMF agreement. The caretaker administration, which took office in August to oversee the Feb. 8 election, was empowered by the outgoing parliament to take any steps needed to meet the budgetary targets agreed with the IMF.

‘No looking back’

Caretaker minister 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 Feb 8 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.”

Details of the privatisation process have not been previously reported. PIA had liabilities of 785 billion Pakistani rupees ($2.81 billion) and accumulated losses of 713 billion rupees as of June last year. Its CEO has said losses in 2023 were likely to be 112 billion rupees. Progress on the privatisation will be a key issue if the incoming government goes back to the IMF once the current bailout programme expires in March.

Caretaker Finance Minister Shamshad Akhtar told reporters last year that Pakistan would have to remain in IMF programmes after the expiry. 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. Fawad did not give specific details of the size of the stake to be sold, but confirmed the plan involved the carrier’s debts being spun off into a separate entity.

(With agency inputs)