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Ahead of election, Pakistan seals plan to sell national airline

ISLAMABAD (PEN) : Ahead of elections next week, Pakistan’s caretaker administration is making binding plans for a new government to sell loss-making Pakistan International Airlines (PIAa.PSX), opens new tab, according to the minister in charge of the process and other officials.

In the past, elected governments have shied away from undertaking unpopular reforms, including the sale of the flag carrier. But Pakistan, in deep economic crisis, agreed in June to overhaul loss-making state-owned enterprises under a deal with the International Monetary Fund (IMF) for a $3 billion bailout.

The government decided to privatise PIA just weeks after signing the IMF agreement.

The caretaker administration, which took office in August to oversee the Feb. 8 election, was empowered by the outgoing parliament to take any steps needed to meet the budgetary targets agreed with the IMF.

“Our job is 98% done,” Privatisation Minister Fawad Hasan Fawad told Reuters when asked about the plan to sell the airline.

“The remaining 2% is just to bring it on an excel sheet after the cabinet approves it.”

Fawad said the plan, drawn up by transaction adviser Ernst & Young, will be presented to the cabinet for approval before the tenure of the administration ends following the election. The cabinet will also decide whether to sell the stake by tender or through a government-to-government deal, Fawad said.

“What we have done in just four months is what past governments have been trying to do for over a decade,” Fawad said. “There is no looking back.”