The federal cabinet approved the restructuring of Pakistan International Airlines (PIA) just two days before the 2024 general elections which would be difficult for the upcoming elected government, media reported Wednesday.
In light of the financial adviser hired for financial restructuring, the national flag carrier would be divided into two companies — TopCo and HoldCo.
The crucial decision was taken during a meeting under Caretaker Prime Minister Anwaar-ul-Haq Kakar’s chairmanship on Tuesday.
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.
Caretaker 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.
Then-Pakistan Democratic Movement (PDM)-led government said in August last year that it would privatise the airline as part of a fiscal discipline plan agreed under an International Monetary Fund (IMF) bailout.
The airline has long been in crisis and then-railway and aviation minister Khawaja Saad Rafique warned that the airline may endure alarming losses of Rs259 billion by the year 2030 if urgent corrective measures are not implemented, including transfer of its administrative control to the private sector.
PIA flights to Europe and the UK have been suspended since 2020 after the European Union’s Aviation Safety Agency revoked the national carrier’s authorisation to fly to the bloc following a scandal over pilot licences.
Other cabinet decisions
Other than that, the federal cabinet recommendation of the ministry also okayed the privatisation of the First Woman Bank.
The federal cabinet at its meeting also decided to stop wheat imports at the government level given its huge reserves in the country. The cabinet meeting endorsed the decision of the Economic Coordination Committee (ECC) of the cabinet taken on February 1 regarding the ban on the import of wheat, which would also result in saving foreign exchange.
The cabinet meeting noted that along with sufficient reserves of wheat, there was also stability in flour prices. It may be pointed out here that recently, the Trading Corporation of Pakistan issued tenders for the import of 110,000 metric tonnes of wheat.
According to estimates, the country would also have a bumper wheat crop for the current season as production of wheat would exceed 32.1 million tons, which is 1.8% more than the target.
A total of 1.376 million tonnes of wheat worth Rs113.13 billion have been imported during the first six months of the current fiscal year.
