According to Radio Pakistan, the federal cabinet — chaired by caretaker Prime Minister Anwaarul Haq Kakar in Islamabad today — consented to the appointment of a financial advisor for the financial and administrative reorganisation of PIA.
The process, however, will not be simple.
The caretakers had initiated the process to sell PIA at the start of the month. Pakistan had agreed back 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 privatise PIA just weeks after signing the IMF agreement.
The caretaker administration, which took office in August to oversee the February 8 election, was empowered by the outgoing parliament to take any steps needed to meet the budgetary targets agreed with the IMF.
The plan hit a hitch when the Election Commission of Pakistan urged the government to suspend any further actions, including agreement signings, related to the privatisation of PIA or its entities until formal clearance is obtained.
In correspondence with the cabinet secretary, the ECP invoked Article 230 of the Constitution, outlining the caretaker government’s roles and limitations, and requested all relevant cabinet documentation.
The move had come after the ECP’s earlier intervention in blocking the FBR overhaul, despite prior cabinet and Special Investment Facilitation Council approval.
The ECP, in a letter dated January 30, had advised the caretaker prime minister to leave the FBR restructuring for the incoming elected government, emphasizing the constitutional framework and the caretaker government’s defined functions.
PIA had liabilities of Rs785bn ($2.81bn) and accumulated losses of Rs713bn as of June last year. Its CEO said losses in 2023 were likely to be Rs112bn.
Besides its losses and debt, PIA’s governance and safety standards have been questioned by global aviation authorities for some years.
According to Radio Pakistan, the federal cabinet — chaired by caretaker Prime Minister Anwaarul Haq Kakar in Islamabad today — consented to the appointment of a financial advisor for the financial and administrative reorganisation of PIA.
“The cabinet was informed that PIA will be bifurcated into two companies namely TopCo and HoldCo. Basic engineering operations, ground handling, cargo, flight kitchen and training will be attached with TopCo, while departments like PIA Investment, Precision Engineering Complex and other subsidiaries as well as properties will be put under HoldCo,” the report said.
It highlighted that these measures would help attract investors towards PIA.
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