PIA, as per a former Chief Executive Officer, suffers a loss of 30 million rupees per month while the entity's total debt at present is estimated at between 200 and 300 billion rupees, according to Secretary Privatisation, Irfan Ali. Business Recorder fully supports PIA's privatisation as the entity's losses continue to mount which, in turn, are paid for by the taxpayers thereby compromising the government's ability to invest appropriate amounts for social and physical infrastructure development. Be that as it may, it is necessary for the Cabinet to first evaluate whether there is adequate time to ensure the sale within the stipulated time (by 15 April 2018) as well as whether, given its remaining tenure of 13 weeks, is the government in a position to not only attract prospective investors as opposition parties, particularly the Pakistan People's Party (PPP), have announced that they would oppose any such move, but also be able to carry out the deal at a reasonable price. In other words, it should not be a case where the opposition charges the government for selling the family silver at throwaway prices.
Equally critical is the element of working out the modalities of the sale or the process for the sale. Would the government seek a strategic investor, which in this country has invariably been accompanied by allegations of nepotism and cronyism, or would the sale through the stock market be the preferred mode. These questions need to be answered before the sale can take place to the satisfaction of parliament as that would ensure that the sale is not subsequently challenged in a court of law or reversed if the PML-N does not form the next government.
Given that PIA privatisation was abandoned by the Sharif administration after the powerful PIA union launched a protest against the sale, a protest that was fully supported by the PPP, it appears extremely doubtful if any successful attempt can possibly be made before the July 2018 general elections. However, in this context, it is relevant to note that during the four-year-long Nawaz Sharif administration, the country was not grappling with as serious a resource constraint (as it had relatively easy access to foreign borrowing given that the country was on an International Monetary Fund programme at the time and donor confidence in the country staying on the path to reform was high) as it is at present. The Shahid Khaqan Abbasi-led administration is facing serious resource constraints given that access to budget support loans from multilaterals/bilaterals have shrunk dramatically after the completion of the IMF programme and the government is engaged in procuring more expensive foreign debt - raising debt equity (2.5 billion of Eurobonds and sukuk issued late last year) as well as reliance on commercial loans from foreign banks. In this context, privatisation appears to be the easy way out as its proceeds are seen as revenue and not as debt.
To conclude, PIA, Pakistan Steel Mills and Pakistan Railways are white elephant, so acknowledged in the PML-N 2013 manifesto, and have been a source of drain on the country's finances for decades. There is therefore a need to privatise them but a mere 13 weeks before the end of the government's tenure may not be the right time unless the government can create a consensus in parliament to proceed.