Ever since the proclamation of the Presidential ordinance converting PIA from public sector corporation to a company – as a prelude to possible sale of 26% of its shares and handing over of its management to private sector - there has been a great hue and cry not only by PIA employees but also by the various political parties culminating in the unprecedented senate resolution against the Presidential ordinance. All this despite the fact that PIA has been a losing concern for years and the federal Government has been bailing it out with precious Taxpayers money of over 400 crores, year after year!

Unfortunately, PIA like many other public sector corporations, has been over-staffed with appointees of various political parties, (mostly) regardless of merit, resulting in PIA’s less than satisfactory performance over the years. Gone were the days when PIA under (late) Air marshal Nur khan (who brooked no non-sense from any quarter) was a “shining star” among the world airlines. Obviously, where personal and political interests prevail, there would be little hope of turning around PIA into a profitable Airline. Apart from these observations, there are several other good reasons why PIA should be privatized.

First and foremost, it is not the business of a Govt to run a business. A Govt is meant to provide enabling environment for the private sector to do business. Its primary responsibility is to ensure peace and security, provide basic amenities/infrastructure, enact business friendly policies and to institute regulatory framework to ensure transparency and public weal.

The erstwhile USSR was the ultimate example of failure of Government ownership of businesses. Even in the hay-day of USSR, mere 3% of the arable land allocated to private individuals produced as much as the rest of the 97% land under the commune system! On the other hand, private sector has been the backbone of booming Economies in the west and south-East Asia.

The great Chinese leader Ding Xiaoping privatized land-holdings and allowed private sector to flourish which catapulted China into “outer space”, so to speak, economically. When pointed out that privatization was anathema to communist Doctrine,he retorted that he did not care whether the colour of the cow was red or black -so long as it gave more milk.

I too have first-hand experience of witnessing the “magic” of privatisation. I was a director on the PIA Board (by virtue of my being the Director General of Civil Aviation Authority, at the time), when PIA board decided to sell its loss-making Inter-Continental Hotels. Mr. Hashwani bought them and since then continental Hotels have flourished. Similarly, we had witnessed how MCB, a loss making Government bank, had become Pakistan’s top bank after it was privatized.

Another good reason for partially privatising PIA is that it is under a colossal debt of some Rs 300 billion (Thirty thousand crores)! Almost Rs three Billion interest is being paid every month, i.e. Rs 36 billion in interest alone every year! PIA will never be able to turn around on its own in the foreseeable future, without the infusion of massive funds, which the Government can ill-afford. Those against PIA’s privatization point out that the Railways, another means of mass public transportation too runs a colossal loss every year and the Government bails it out. However they are not comparing “apple to apple”. The railways caters to a very large part of population, mostly middle or lower middle class, while PIA caters to only a small reasonably well-to-do, small part of the population. So, while there is ample justification for Government to bail out the railways, there was little justification for subsiding PIA. Besides, there are several private Airlines in the country running successfully without the Govt’s subsidy.

The massive infusion of over 400 crores every year, of the hard earned tax payers money, is in fact a typical case of “double jeopardy”. The huge subsidy barely keeps PIA afloat, while depriving vital needs of the Social sector. Over 40% of our children do not go to school as there are no schools to go to. By saving Rs 400 crores thru partial privatization of PIA, we could build as many as 100 primary schools every year. Thus, by not (partially) privatising PIA we are under cutting our vital national interest.

To conclude, though PIA has ample assets, it lacks liquidity to pay-off its huge debt orto substantially expand its fleet tobe able to become profitable. The only way PIA can survive and prosper is to get out of the vicious circle of Debt and repayment not be and thus a perpetual burden on limited Govt revenue, is by selling part of its huge assets (26%) to generate adequate funds.

Of course, while selling off PIA’S shares and handing over its management to the private sector, the Government must ensure that the interest of PIA employees is in no way compromised. One way to ensure it would be to provide “Golden handshake” to surplus employees prior to (partial) privatisation.

Even more important, is to ensure that value of PIA’s share in the stock market goes up prior to selling-off its shares, by turning around PIA to the extent possible, so as to bolster its share value to around Rs 40-50, as compared to the measly Rs 8 per share at present. Looking at the track record of the past two years and half, I believe that those at the helm of Aviation Division are quite capable of achieving this goal provided they are allowed the freedom of action. As for those opposing this logical and plausible solution to PIA’s woes, which is also draining our limited revenue, I would urge upon them to place the wider National Interest at heart.

“Let it not be said that we did not prove equal to the task”