ISLAMABAD, April 12: The parliament has adopted a law that will convert the cash-strapped national airline into a limited company but bar the government from giving up its management control, officials said on Tuesday.
The passage of the law, which blocks selling off a majority share in Pakistan International Airlines (PIA), late on Monday, was a major setback for Prime Minister Nawaz Sharif who made the privatisation of the company a top goal when he came to power in 2013.
The privatisation of 68 state-owned companies, which include loss-making enterprises like PIA and Pakistan Steel Mills, is also a major element in a $6.7 billion IMF package that helped Pakistan stave off a default in 2013.
The government had struggled to meet its deadline to sell PIA, which has accumulated losses of more than $3 billion, after a delay of many months in amending a 1956 law that barred it from being privately owned. After months of legal wrangling between government and opposition representatives, a joint session of the upper and lower houses of parliament unanimously passed a bill that blocks the privatisation of the airline. “Management control of the company and any of its subsidiary companies … shall continue to vest in majority shareholders, which shall be the federal government and whose share shall not be less than 51 per cent,” the law reads. Privatisation Commission Chairman Mohammad Zubair, who is a member of Sharif’s ruling party, said the government would remain the major shareholder. “We have agreed with the opposition parties that PIA will not be privatised,” he told Reuters. “It is only being converted into a private entity to ensure more efficient running.” He said the bill was a compromise because resistance from unions and opposition parties was “too strong”. – Agencies0
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