KARACHI: Privatization plan of Pakistan International Airlines (PIA) for upcoming year has faced setbacks, as Privatisation Commission couldn't resolve issues related to loan repayments and legal matters.

Sources close to development stated that interim Minister for Privatisation Fawad Hussain Fawad failed to implement plan to transfer PIA to private sector by January 2024.

Ministry of Finance will decide to meet financial requirements of PIA for next 3 months, while PIA has borrowed more than Rs 270 billion from commercial banks on government guarantee. Sources suggest that PIA cannot afford to pay more than Rs 8 billion in interest on Rs 260 billion loan. Commercial banks involved in lending to PIA include National Bank and Bank of Punjab along with eight other commercial banks.

Decision to reschedule government loans until privatisation of PIA could not be finalised. Ministry of Finance will establish committee to decide on financial requirements of PIA.

Sources told that PIA's financial affairs will be handed over to Privatisation Commission as latter would take measures to reduce its losses. Sources further claimed that Commission will link national carrier's financial affairs with latest system. By improving PIA's financial affairs, Commission will improve its balance sheet which will help in carrier's privatisation.

Meanwhile, sources added that administrative control of institution will continue to be with PIA's management. Moreover, administrative affairs will remain under Ministry of Aviation.

Published in The Daily National Courier, December, 29 2023

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