ISLAMABAD - As the interim government huddles to sell its financially burdened organisations, and meet IMF targets - privatise loss making government institutions, a Gulf state have shown interest in purchase of Pakistan International Airline for over $2 billion, informed sources told The Nation.
“The sell off does not have PIA’s prime property- Roosevelt Hotel, New York,” a senior official associated with the federal assignment, said on condition of anonymity.
“State of Qatar, has shown its interest in purchase of PIA,” said the official adding, Interim Minister Fawad Hasan Fawad has been meeting official( s) of Qatar, and background discussions, and meetings were much in progress to sell the state carrier in a smooth manner.
It is worth noting that in the first week of September this year the cabinet under the interim premier had already given a go ahead for early, and emergent sale of PIA.
For the same task Fawad Hasan Fawad’s Privatisation Commission, official said, had formed a technical committee to resolve any ‘bottlenecks’ coming in the way of the privatisation, and restructuring of the state airline.
“The technical committee’s report is almost complete, and will be shared with the Cabinet Committee on Privatisation (CCoP) meeting in coming days,” the official remarked.
The official shared excerpts of the report with The Nation, saying: “The key bottlenecks are employees, and their financial severance package, which involves huge financial sum, and Finance Division may not agree to it.”
“Ageing fleet of the airline is also an issue, since why would an international buyer opt for old fleet of PIA, the buyer might inject its own new jetfleet,” he maintained.
“If the government really wants to get a cash-chip from the buyers it has to go for settlement with the lessors, as per the lease agreement of each jet plane having flight worthiness,” maintained the official.
Regarding the Roosevelt Hotel property he said: the “Roosevelt Hotel had already been leased out to New York State government but Qatar government still sees huge potential in the routes of the state airline.”
The previous government had leased the 1250-room, prime New York property to New York State government for a period of three years for around $220 million. The New York State government will house its migrants at the hotel intermittently during the coming three years.
The report, he said, also highlights the core assets identified for sale of the state carrier were PIAs routes, landing rights, core engineering services, and air service agreements.
“The costliest routes for sale are direct flights to UAE, Jeddah, London, Toronto, Rome, and New York, which will boost PIAs sale value,” informed the official.
“If the routes value in terms of cash is added PIA should go for a sell off more than $3.5 billion,” insisted the official.
However, a Ministry of Finance official, while speaking to The Nation said: “It’s a breakthrough for us (interim government), despite the fact that PIA is cash-strapped, and we are just burning jet fuel money for no use.”
PIA, he said, already registered a staggering loss of over 60 billion in its first quarter in the ongoing year, and “we want to save national money, and wanted to invest the same in social development projects.”
Fawad Hasan Fawad while appearing on a private television talk show said: “One international aviation advising company has completed the financial evaluation of the airline which will be placed before the privatisation board and now technical evaluation will be done in coming few weeks.”
“Despite losses our (PIAs) landing rights of few countries are of high value and will fetch a good point to sell the state carrier on better rate.”
However, the minister did not make a comment whether Qatar or any other Gulf state has shown its interest in buying the airline.
Despite repeated attempts Caretaker Privatisation Minister Fawad Hasan Fawad did not respond to a text message, and calls made for his version on the story by this scribe.
Asim qadeer rana
–The writer is a freelance contributor
