PIA Privatization By A National Damage!

 

Pakistan has been privatising state enterprises since the 1980s. However, the pace of privatisation skyrocketed in the 1990s when the country due to bad management of it's balance sheet and low internal revenue generation had to borrow a substantial size of money from IMF to repay the interest on its loans.

IMF never suggested to privatise one enterprise or the other, it's sole purpose was to ensure that Pakistan make it's payment on its loans well in time to avoid a default. Pakistan could have done it by increasing its revenues and that's possible if govt increases taxes (Right now Pakistan is one of the lowest tax collecting country, 11 percent tax to GDP, while India 17 percent).
Pakistani leaders always promised to IMF that they would increase the taxes, document the economy, levy agricultural tax, and they did some lip-service too, but their preference has always been privatization of the state enterprises to balance the deficit and make payment on foreign loans.

However, this policy of over-focusing privatisation has resulted in a state where over 200 state enterprises have been privatised but debts of the country have doubled since the 1990s with leaving tens of thousands young people pushing into the pond of unemployment!
Once again, Pakistani leaders are telling the nation that by privatising the PIA, the country would get rid of a financial burden and the airline will be once again on the way to progress. Nothing could be far from truth then this assertion. The leaders are fudging figures, distorting facts and telling lies just to push the privatisation of PIA, no matter how much blood is spilt.

Recently, the present government announced privatization of PIA in a different way. They said they were not privatising, they were converting it into a limited company so that a strategic partnership with the private sector could be created. However, at the same time the govt announced to form another airline, Pakistan Airways, parallel to PIA. This clearly shows that the govt plans to liquidate PIA or turn it into a paper-company while all operational work be transferred to the new airways. Some say PIA would be renamed as Pak Airways.

However, If PIA's name is changed it'll lose 10 landing rights per week at the Heathrow Airport. It should be noted that these landing rights are strictly in the name of PIA (Pakistan International Airline) since 1960. One landing right at Heathrow would approximately cost £45 million, so it means it would be a loss of £450 million if PIA's name vanishes away.

During the recent country-wide strike of the PIA employees when no flight took off from any Pakistani airport, the Pakistan Govt wrote a letter to the Heathrow Authority to allow Air Blue to use the landing rights slot which are PIA's exclusive rights. The Heathrow Authority straightaway refused Pak Govt's request saying only PIA could avail these rights no one else.
Pakistan is likely to lose such rights at other airports as well if PIA is liquidated.
This might be the reason that instead of changing the name of PIA, Pakistani govt is creating a subsidiary of the PIA under the name of Pakistan Airways so that the new airline could possibly continue to use PIA's entitlements at the Heathrow.

Under the present circumstances, even if Pakistani govt manages to raise an amount of £45 million per landing right, still no new airline would be able to get the landing right. And the reason is simple; the Heathrow Airport is one of the busiest airports in the world and it cannot create new landing rights for any new airlines/airways.
So technically the Pakistani Govt is trying to use all legal international facilities entitled to PIA for the Pak Airways by hoodwinking the Heathrow Authority.
The rulers do not want to understand how big a national damage they are going to cause by liquidating PIA.
Common sense will ask that if there is a national flag career with the name of PIA then why to create its subsidiary with the name of Pak Airways! Moreover, there are examples in the world that some countries created new airlines without destroying their national airlines.

The writer of this article is a London-based journalist of Lahori origin, he can be reached at: imam6@hotmail.com

by webmaster@insaf.pk (tkiadmin)