Govt approves Rs4.4 billion for retired PIA employees’ pensions, medical dues after privatisation

The Economic Coordination Committee (ECC) of the federal cabinet has approved Rs4.4 billion to clear medical and pension liabilities of retired employees of Pakistan International Airlines  Corporation Limited (PIACL) following its privatisation.

The decision was taken at a meeting chaired by Finance Minister Muhammad Aurangzeb on Monday, where the ECC considered a request from the Ministry of Defence for Rs6 billion in support of PIA Holding Company Limited to meet liabilities of PIACL.

Out of the requested amount, the ECC approved funding for medical and pension reimbursements as well as salary payments, allocating Rs4.4 billion specifically for retirees’ dues.

The committee also approved Rs455 million for salary payments to employees of the Precision Engineering Complex, which has been separated from PIACL and placed under the Ministry of Defence.

However, the ECC did not approve a Rs1.1 billion allocation sought by PIACL and directed that the matter related to payments to the National Insurance Company Limited be taken up with the relevant revenue authorities in line with audit recommendations. 

The Federal Board of Revenue has already declined the refund claim.

The approvals come after the government’s divestment of a 75% stake in PIA for Rs135 billion. Under the share purchase agreement, the airline is required to maintain positive equity, a condition that depends on continued financial support.