The Senate’s Special Committee on the Performance of Pakistan International Airlines (PIA) on Thursday directed re-evaluation of the PIA’s assets market value and cargo share of its total earnings.
The committee, chaired by Senator Mushahidullah Khan expressed its indignation over dubious evaluation of PIA assets and failure of PIA management to take benefit of persistent fuel price decrease.
The committee was unanimous that the main issues plaguing the PIA were not its excessive employees but non mobilization of revenues, rampant corruption and mismanagement.
The committee noted that engineering department of PIA was in a shambles.
The committee demanded a comprehensive presentation on working of PIA to the committee in next meeting. The committee directed the government to avoid retrenching PIA employees after handing over its management control to strategic investor.
The committee asked the management to submit details of procurement procedure of PIA.
The committee was angry over the last submission of working papers of agenda items. The committee noted that the decision to buy aircraft on lease was wrong due to their huge running cost.
Briefing the committee, Chairman PIA and Secretary Aviation Muhammad Irfan Elahi said liabilities of PIA has surpassed its assets’ value. PIA is enjoying 47 percent market share of domestic and 24 percent of international traffic.
The committee was told that the real impact of PIA employees’ strike would be visible in March. The main reason of loss was due to liabilities of up to Rs 179 billion accumulated in last decade.
Two hotels of PIA situated in United States and France had earned only $ 40 million in the last five years.
Chairman Privatization Commission Muhammad Zubair said evaluation of PIA assets has not yet been done and it was wrong perception that the entity was being sold sans adopting set procedure.
Handing over of management control of PIA was impossible right now, as bill in that regard was still awaiting Senate’s approval.
PIA started enduring losses due to persistent deterioration in services.
Now a plan had been conceived to earn Rs 103 billion profits per annum. There must be 60 planes for transforming PIA into profit taking entity.
He said 26 percent share including management control of PIA would be handed over to strategic partner. There would be no forced retrenchment of employees for two years. The process could be started after Senate’s approval.
Responding to questions of the committee, Secretary Aviation said the Pakistan Airways, created with Rs 100 billion would have separate management.
Aircraft would be procured on lease for new airline. Staff would be inducted on merit on contract basis. However expertise of PIA could also be utilized for Pakistan Airways.
Senator Usman Khan Kakar said how another airline was being created when existing one (PIA) was not being run properly.
Mushahidullah Khan said PIA was not being privatized only 26 percent management control was being handed over to strategic investor.
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