ISLAMABAD - Although the government has decided to separate PIA’s core and non-core functions but its privatisation is unlikely during tenure of the incumbent government due to lack of time.

The Cabinet Committee on Privatisation (CCoP) on Friday approved the bifurcation of the PIA’s non-core business and assets from air transport-related operations before April this year, a move that may lead for divestment transaction of national flag carrier. Federal Minister for Privatization Daniyal Aziz last month had announced that bifurcation of the PIA’s non-core business and assets from air transport-related operations will be completed by April and the divestment transaction will be concluded before the government completes its tenure in June.

However, the government might struggle to privatise the national flag carrier in the next three months, before May this year when the five years constitutional tenure of the incumbent government would complete, The Nation has learnt in background discussions with the officials of Privatisation Commission and Ministry of Finance. They said that government had not privatised PIA and PSM in its more than four and half a years tenure. 

“Process of privatizing cannot complete in three months,” said an official of the Privatisation Commission. He further said that minimum time required to prepare an entity for the bidding is around six to 10 months under the laws to ensure a transparent and fair process.

Even, Adviser to the Prime Minister on Aviation Sardar Mehtab Abbasi had recently ruled out the possibility of the national flag carrier's privatisation before election. Abbasi had recently said in Senate that the government was about to complete its tenure, whereas it was quite impossible to complete the process of privatisation within next two months as the process takes years to be completed. The privatisation process of PIA may take three to five years, he added.

The govt recently submitted its Fiscal Policy Statement for 2017-18 into the National Assembly, which stated the government would restructure the PIA and would be followed by divestment of 26 percent government of Pakistan equity stakes to strategic partner with management control.

According to that statement, the government is working on three transactions including Mari Petroleum Company Limited (MPCL), SME Bank and Pakistan Steel Mills for divestment and accomplishing finding out strategic partner during the current fiscal year. “Privatization Commission is in the process of finalising the appointment of financial advisers for the divestment of up to 18 percent of shares in MPCL to domestic and international investors through the Pakistan Stock Exchange,” said the statement. It added that pre-qualification of interested parties for the strategic sale of government’s 94 percent shareholding of SME Bank Ltd is being finalised.

The CCoP also considered a proposal for Pakistan Steel Mills (PSM) for entering into a concession agreement with investors, on revenue sharing basis.

Meanwhile, the major opposition party, Pakistan Peoples Party (PPP) has announced to start campaign against the privatization of public sector entities. “The PML-N government has no authority to privatize the Pakistan International Airlines and Pakistan Steel Mills few months before of ending its tenure,” said PPP Senator Saleem Mandviwalla, who is also chairman of Senate standing committee on finance. “Hurried privatisation of the PIA will put the next government in a lot of problems when it will come to the implementation of the privatisation,” he remarked.

Mandviwalla said that all the political parties had passed Pakistan International Airlines Corporation (Conversion) Act, 2016, for the revival of the national flag carrier.