Cash-strapped Pakistan is going to sell its national air carrier, Pakistan International Airlines (PIA). Facing strict conditions of the International Monetary Fund (IMF), a foundation under the Pakistani Army, Fauji Fertilizer Company Limited (FFCL), is also among the bidders that will make a bid for the airline.
With reference to Pakistan Prime Minister Shehbaz Sharif, a report suggests that all Pakistani media will broadcast the auction live.
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Pak govt aims to earn 86 billion through privatisation
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According to the Dawn newspaper, disinvestment of 51%–100% in PIA is one of the major conditions of the IMF bailout package. According to the disinvestment minister, Muhammad Ali, who told Reuters that the Pakistan government aims to earn 86 billion through privatisation. The government of Pakistan will get only 15% of the income from the final bid, while the rest of the income will remain with the company.
For the auction, four bidders have been qualified:
-Lucky Cement Consortium
-Asif Habib Corporation Consortium
-Fauji Fertilizer Company Limited
- AirBlue Limited
Munir has power to appoint QMG
Notably, Fauji Fertilizer is part of the Fauji Foundation, which has turned into a major corporate conglomerate in Pakistan. The Army has a role in all major sectors, and it signifies how Chief of Army Staff Field Marshal Asim Munir has influence despite not being a member of the central board of directors of the foundation. He has the power to appoint the Quarter Master General (QMG), who has a key role on the board. Thus, Asim Munir has indirect influence in the Fauji Foundation.
The disinvestment of PIA is also important because Pakistan has to repay its debt to obtain a new loan. In 2023, due to financial mismanagement, Pakistan found itself on the verge of being labelled a defaulter. Pakistan spends most of its budget on defence forces.
Pakistan is the fifth-largest borrower of IMF
In September 2024, the IMF sanctioned a $7 billion programme, and the nation received $1 billion in the first year, while the remaining amount will be disbursed over the next three years. Struggling on the economic front, Pakistan is the fifth-largest borrower of the IMF. The nation has taken loans from the IMF more than 20 times.
It is noteworthy that PIA is facing a financial crunch. In November 2023, 7,000 employees of PIA did not receive their salaries. In 2020, the European Union had debarred the airline from carrying out its operations due to lack of safety standards.