ISLAMABAD: Pakistan International Airlines (PIA) miseries keep worsening as it has been learnt that it failed to deposit Rs6 billion as Federal Excise Duty deducted from employees’ salaries to Federal Board of Revenue (FBR).
This was disclosed in a recent meeting Economic Coordination Committee (ECC) meeting of the cabinet, reported Business Recorder. Aviation Division said PIA was facing a severe financial crunch due to continuous losses being ratcheted up, which is also impeding operations.
Several suppliers have stopped supplying to PIA due to non-payments and lessors are being served default notices. PIA has forwarded its financial requirements for period of July-December 2017, which are GOP guaranteed loan installments of Rs17.017 billion, non-GOP guaranteed loan payments, Rs7.132 billion and lastly mark-up payments to the tune of Rs6.113 billion.
Aviation Division also shared that PIA would attempt to pay off non-GOP guaranteed principal installments totalling Rs7.132 billion via its own sources. And GOP guaranteed principal installments of Rs17.017 billion will be settled via roll-over of guarantees with help of Ministry of Finance. But PIA would also require assistance for mark-up payment of Rs6.113 billion.
In a recent ECC meeting of cabinet, Aviation Division apprised the Prime Minister of PIA sought governments help for capital expenditures, which includes engineering projects worth Rs2.0 billion and ground support projects worth Rs1.0 billion.
Civil Aviation Authority has also provided space to PIA for the establishment of certain operational facilities at New Islamabad International Airport (NIIAP) project site. This space will be utilized for the setting up of a flight kitchen, wide body aircraft maintenance/repair, hangar and technical ground support equipment area and handling offices. These projects will cost PIA around Rs6.90 billion.
Finance Division has approved the proposal and sanctioned GOP guarantee up to a rationalized limit of Rs13.585 billion, which will be approved by ECC. It suggested PIA to constitute a detailed debt retirement plan on a long-term basis instead of requesting for more loan to pay off existing ones.
It warned not only will regular borrowing make it unsustainable, but also impact PIAs going concern status. During the meeting, it was informed PIA had prepared a detailed business plan which will be submitted to Federal Cabinet.
