Islamabad: Pakistan’s caretaker cabinet, in a swansong move, has approved the restructuring of the national carrier, Pakistan International Airlines, as part of measures to privatise the loss-making airline.
Pakistan International Airlines (PIA) has been running into loss for years and the caretakers just two days before elections decided to bifurcate it into two entities, according to a statement issued after the cabinet meeting held late Tuesday.
The meeting chaired by caretaker Prime Minister Anwaarul Haq Kakar was informed that in the light of the financial adviser hired for financial restructuring, the functions of the national flag carrier would be bifurcated into two companies, namely TopCo and HoldCo.
Some basic operations, including engineering, ground handling, flight kitchen, and training, would be assigned to TopCo while Precision Engineering Complex, PIA Investment Limited, and subordinate departments and properties would be given to HoldCo.
Minister for Privatisation Fawad Hasan Fawad, who moved the summary, informed the cabinet that such a step would result in attracting investors towards PIA.
The meeting also directed settling disputes about dues to government organisations against PIA to complete the restructuring process in the shortest possible time.
The cabinet recommendation of the Ministry of Privatisation also gave a nod to the privatisation of the First Woman Bank.
The decision to bifurcate the PIA was to pave the way for its privatisation but it came too late when the caretaker set-up had a limited time and it would cease to function when the new leader of the house was elected by the parliament after the election of February 8.
Several previous governments tried to sell the PIA but had to shelve the idea due to its political cost because the opposition parties had opposed it in order to win the sympathy of thousands of employees of the airline.
It was believed that the caretaker would carry out the onerous job without any fear of backlash but it took too long to smoothen the process and by the time it was in position to make a move, the Election Commission of Pakistan intervened.
Though the cabinet took the crucial decision to bifurcate the national flag carrier to help the new government to go ahead with the privatization, the actual decision about its fate would rest with the future government and could be difficult to execute.
PTI