National Privatization Commission’s plan to privatize Pakistan International Airlines (PIA) by January next year has encountered difficulties, sources have revealed.
According to sources, the legal hurdles and challenges in repaying loans for PIA have thwarted progress in the privatization process.
Despite Caretaker Minister for Privatization Fawad Hassan Fawad’s intention to transfer PIA to the private sector by January, the unresolved legal issues and financial constraints have cast a shadow over the privatization initiative.
With PIA facing financial constraints, the Finance Ministry is expected to make a crucial decision in the next three months to address the airline’s financial requirements.
However, reports suggest that the privatization effort has faced setbacks, and a final decision on restructuring government loans for PIA has been deferred.
Sources indicate that PIA has borrowed over Rs. 270 billion from commercial banks, including the National Bank and Bank of Punjab, with government guarantees.
The airline’s ability to meet loan repayment obligations is limited, with sources emphasizing that it cannot afford to pay more than Rs. 8 billion in interest on a Rs. 260 billion loan.
As the situation unfolds, the Finance Committee in the Treasury Department is set to play a pivotal role in making the final decision on PIA’s financial requirements.
The complexities surrounding PIA’s privatization continue to raise questions about the viability of the plan and the financial stability of the national carrier.
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