The Cabinet Committee On Privatization (CCOP) approved Tuesday a plan to accelerate the privatization of Pakistan International Airlines Corporation (Piacl), including the disinvestment of 51 to 100% of share capital as well as control of management.
Vice-Prime Minister and Minister of Foreign Affairs Ishaq Dar chaired the meeting, according to a statement.
The Deputy Prime Minister reaffirmed the government’s commitment to the privatization of Piac, aimed at unlocking its full potential and facilitating financial pressure on the national chessboard.
At the beginning of February, the government announced that it planned to issue an expression of interest (EOI) this month in a renewed attempt to privatize the national standard bearer, offering a clean assessment and protecting the buyer of a TPS of 18% on planes purchases, following the approval of the International Monetary Fund (IMF).
According to The news, In a previous attempt to sell this active, the interested parties had fell from their plans and even abstained from the tender process because they thought that the two important obstacles would prevent them from managing the airline. They are now ready to participate in the process.
They had previously demanded that the results of the aircraft of the negative equity of 45 billion rupees be authorized and that the GST be removed from the purchase of aircraft.
The government has now started the negative equity absorption process of 45 billion rupees, which consists of RS26 billion FBR taxes, 10 billion rupees in civil aviation charges and the amount of rest as retirement responsibility, following negotiations with the fund and the resulting approval.
Remarkably, the privatization of the airline will also be a prerequisite for this balance sheet authorization, the senior officials of the privatization committee have informed a parliamentary panel.
The government has reassured the financial council of the transaction to the British multinational Ernst & Young (E&Y). Part of the previous payment has already been made, but no additional funds will be paid unless the transaction is completed. During a previous attempt, $ 4 million in a milestone of $ 6.269 million was made to Ernst & Young, as well as $ 0.251 million in unconditional payment of $ 0.609 million
A mechanism would be designed to treat the unanswered responsibilities, ensuring that financial charges do not become an obstacle to potential investors.
The government has already separated the non -essential assets from the PIA tenders’ tender process, said Usman Bajwa, the secretary of privatization, said the National Assembly on privatization.
The government has already resumed the PIA liabilities of 650 billion rupees, with 45 billion additional compulsory rupees to be paid before privatization. PIA assets are currently estimated at 155 billion rupees, while its liabilities amount to 200 billion rupees.
The new buyer will initially add 15 to 20 new planes to the fleet.