Home Latest News Interim Cabinet Approves Restructuring of PIA

Interim Cabinet Approves Restructuring of PIA

National flag carrier to be divided into two companies to attract investors

by Staff Report

File photo. Asif Hassan—AFP

The federal cabinet on Tuesday, in its final meeting before the Feb. 8 general elections, approved the restructuring of national flag carrier Pakistan International Airlines (PIA), according to state-run Radio Pakistan.

According to the report, the cabinet meeting—chaired by interim Prime Minister Anwaarul Haq Kakar—agreed to appoint a financial adviser for the financial and administrative reorganization of PIA. “The cabinet was informed that PIA would be bifurcated into two companies namely TopCo and HoldCo. Basic engineering operations, ground handling, cargo, flight kitchen and training will be attached with TopCo, while departments like PIA Investment, Precision Engineering Complex and other subsidiaries as well as properties will be put under HoldCo,” it said, maintaining this would help attract investors for the eventual sale of PIA.

The report said the cabinet also directed its sub-committee on privatization to dispose of matters related to state-owned entities’ claims of undecided amounts on PIA at the earliest.

Pending for several years, the privatization of PIA gained pace under the Pakistan Democratic Movement (PDM)-led government, which said it had agreed to the move under a fiscal discipline plan with the International Monetary Fund (IMF). At the time, Railways and Aviation Minister Khawaja Saad Rafique had warned the airline’s losses could reach Rs. 259 annually by 2030 if urgent corrective measures were not implemented.

While the interim cabinet has agreed to the privatization, the implementation would likely fall to the incoming government, as the Election Commission of Pakistan (ECP) had earlier directed the caretakers to “refrain from taking any further steps including the signing of an agreement” until the matter was formally cleared. In a letter, the electoral body had reminded the government that Article 230 of the Constitution restricts its role to overseeing the day-to-day affairs of matters of state.

However, the approval for the privatization would likely prove a boon for the incoming government, as political governments often shy from taking such controversial measures, with the Pakistan Peoples Party (PPP) maintaining during its campaign it did not support the privatization.

Other decisions

Also on Tuesday, the interim cabinet approved the privatization of the First Woman Bank and decided to halt wheat imports, on the recommendation of the Economic Coordination Committee, at the government level owing to sufficient reserves. Thus far, per government figures, 1.376 million tons of wheat, valued at Rs. 113.13 billion, were imported in the first six months of the current fiscal year.

The cabinet further approved the deregulation of prices for all medicines apart from essential drugs by exempting medicines from the Drug Act 1976 through necessary amendments in the Drug Policy 2018. It also decided that the Pakistan Medical and Dental Council would ensure that doctors must not prescribe vitamins, multivitamins, minerals and other such drugs to patients.

The caretakers also allowed the conversion of four of eight accountability courts in Peshawar to special courts, while approving a proposal of the chief justice of the Peshawar High Court for the appointment of judges to these courts. The remaining four courts would continue to function as accountability courts.

On the recommendation of the Ministry of Defense Production, the cabinet approved the appointment of Lt. Gen. Tahir Hameed Shah as chairman and member of the Wah Ordinance Factories Board with effect from Nov. 29, 2023.

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