ISLAMABAD: The Federal Minister for Privatisation, Fawad Hasan Fawad has commented that the Pakistan International Airline (PIA) has emerged as the foremost priority for privatisation due to its persistent and staggering financial losses.
The caretaker minister shared this during a meeting with Country Director of World Bank Najy Benhassi today.
The heart of their discussions lay in the caretaker government’s strategic agenda for privatisation, with specific attention to privatising Pakistan International Airlines (PIA) and optimising the performance of Distribution Companies (DisCos).
The effort aims to rectify substantial financial losses incurred by these entities and thereby alleviate the fiscal burden on the government.
The Minister said that the Federal government including the apex committee of SIFC, comprising civil bureaucracy, military leadership, and political stakeholders, has unanimously agreed to undertake the privatisation of major loss-making State-Owned Enterprises (SOEs) which are on the privatisation list.
Amongst those, the PIA has emerged as a foremost priority, due to its persistent and staggering financial losses, amounting to billions of rupees annually. Privatising PIA is considered imperative for the removal of these losses and the improvement of its operational efficiency.
Minister Fawad Hasan Fawad explained the outlines of the PIA privatisation plan, expressing the government’s intention to engage the World Bank and other financial institutions at the initial phases of this effort. The overarching objective is to attract much-needed private investment through the privatisation process, thereby unlocking government funds for deployment in vital infrastructure development and other strategic sectors. Furthermore, the minister highlighted the intention of developing a comprehensive model for PIA, with the World Bank remaining a key partner for potential future support.
The minister also discussed DisCos given their substantial annual losses, which currently stand at a staggering $2.5 billion. Two productive sessions with the International Finance Corporation (IFC) have already occurred, focusing on formulating a long-term concession model to mitigate these losses. Ongoing discussions with the IFC are expected to yield a concrete strategy for private sector participation in the DisCos, with a prime objective of privatising them.The meeting encompassed a broader range of support areas, encompassing advisory and legal assistance. These aspects are considered crucial in ensuring the successful execution of the privatisation process.
The meeting took place in the backdrop of the Pakistan government actively seeking the World Bank’s support and collaboration throughout the privatisation process.
