The Senate Standing Committee on Privatisation expressed concern on Thursday over “the lack of participation by leading international airlines” in the privatisation process of the Pakistan International Airlines Corporation Limited (PIACL).
The committee was briefed on the privatisation of the PIACL, latest plans & developments on Roosevelt Hotel and prominent Airports of the country, and transfer of the Precision Engineering Complex to the Pakistan Air Force.
“The committee expressed concern over the lack of participation by leading international airlines in the privatisation process of PIACL. The Secretary, Privatisation Commission (PC), informed that although the opportunity was marketed across the region, regional airline companies were reluctant to invest in a competitor,” a statement from the Senate Secretariat read.
The committee meeting was held under the chairmanship of Senator Dr Afnan Ullah Khan.
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The meeting was informed that the privatisation process of the PIACL was currently in its phase of second attempt for privatisation.
“The terms and conditions are being discussed among the stakeholders and the government. Four consortiums/bidders have shown interest in participating in the bidding process. It was further informed that all stakeholders are currently analysing the liabilities and assets of PIACL. After mutual consensus on the terms and conditions, the PIACL is expected to be privatised by the end of this year.”
Meanwhile, the committee was informed that the Precision Engineering Complex was a defence-related complex, comprising 223 employees and carrying liabilities pertaining to 381 retired employees.
“The complex spans over 200 acres of land. Since 1980s, PEC has been engaged in the manufacturing of aircraft parts for Boeing and has also contributed to the production of defence equipment,” the statement said.
Responding to a query raised by the committee chairman, the PC secretary informed that the revenue generation of the complex during the current year stood at Rs397 million, whereas its expenditures exceeded Rs850 million.
“In line with the Cabinet decision dated May 1, the ownership of the Precision Engineering Complex will be transferred from PIACL to the Pakistan Air Force, along with all existing liabilities and assets.”
The committee also inquired about the status of the outsourcing of landside services at the Islamabad International Airport. It was briefed that a Turkish company initially participated in the bidding process but later withdrew due to unresolved issues over the percentage share ratio between the company and the government.
“It was further informed that a government-to-government (G2G) agreement with the United Arab Emirates (UAE) is currently under discussion for the management of landside services at Islamabad Airport.”
The committee chairman recommended that the landside services of Islamabad International Airport be outsourced to a reputable international company capable of managing operations efficiently and providing world-class facilities in accordance with international standards.
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While briefing the committee on the Roosevelt Hotel, New York, the PC secretary informed that the financial advisory firm JLL (Financial/Real Estate Advisor) had conducted due diligence and analysed the transactional structure of the property, comprised over 650,000 square feet, including a 17-storey building.
“The advisory firm proposed a joint venture structure with multiple exit options for the Government of Pakistan. The proposal was approved by the Federal Cabinet on July 8; however, the advisory firm later withdrew its services due to a conflict of interest. The Government of Pakistan is now in the process of hiring another financial advisory company to continue the privatisation process,” the statement read.
The committee chairman appreciated the privatisation of the First Women Bank Limited (FWBL), which was acquired by the International Holding Company (IHC), a UAE-based firm, along with all its liabilities and employees.
He further directed the concerned authorities to resolve the pending issues and complaints of retired PIACL employees regarding their pensions at the earliest.
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