IMF 'encouraged' by PIA reform step, awaits more plans

Published April 13, 2016
“We are encouraged that a consensus has been reached on corporatization of PIA,” says IMF mission chief for Pakistan.─Reuters/File
“We are encouraged that a consensus has been reached on corporatization of PIA,” says IMF mission chief for Pakistan.─Reuters/File

ISLAMABAD: The International Monetary Fund (IMF) is encouraged that Pakistan will convert cash-strapped Pakistan International Airlines (PIA) into a limited company but said on Wednesday it will see if the reforms go far enough in restructuring the company.

Parliament adopted a law on Monday to convert PIA into a limited company but it prevents the government from giving up its management control.

Related: Bill to turn PIA into company adopted

Prime Minister Nawaz Sharif had made the privatisation of the company a top goal when he came to power in 2013.

The privatisation of it and 67 other state-owned companies is also a major element of a $6.7 billion IMF package that helped Pakistan stave off default in 2013. The IMF has continued to release loan instalments despite missed targets.

“We are encouraged that a consensus has been reached on corporatization of PIA,” Harald Finger, IMF mission chief for Pakistan, told Reuters in an email.

“We will need to study the approved bill and discuss with the authorities their emerging plans to run PIA strictly as a commercial entity and strengthen its performance in the absence of a transfer of management control to a private investor.” PIA has accumulated losses of more than $3 billion.

Also Read: PIA’s privatisation ‘right on track’

It and other loss-making companies, including power distribution companies and steel giant Pakistan Steel Mills, cost the government an estimated $5 billion a year.

In February, the IMF released the last $497 million tranche of its loan, even after Pakistan shelved plans to privatise its power supply companies and said it would miss deadlines to sell other loss-making state firms.

Another $1.1 billion remains to be released

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Kurram atrocity
Updated 22 Nov, 2024

Kurram atrocity

It would be a monumental mistake for the state to continue ignoring the violence in Kurram.
Persistent grip
22 Nov, 2024

Persistent grip

PAKISTAN has now registered 50 polio cases this year. We all saw it coming and yet there was nothing we could do to...
Green transport
22 Nov, 2024

Green transport

THE government has taken a commendable step by announcing a New Energy Vehicle policy aiming to ensure that by 2030,...
Military option
Updated 21 Nov, 2024

Military option

While restoring peace is essential, addressing Balochistan’s socioeconomic deprivation is equally important.
HIV/AIDS disaster
21 Nov, 2024

HIV/AIDS disaster

A TORTUROUS sense of déjà vu is attached to the latest health fiasco at Multan’s Nishtar Hospital. The largest...
Dubious pardon
21 Nov, 2024

Dubious pardon

IT is disturbing how a crime as grave as custodial death has culminated in an out-of-court ‘settlement’. The...