THE much-talked-about process of privatization of the national flag carrier – Pakistan International Airlines (PIA) – received a severe bolt as the sole bidder offered a joking price of Rs. 10 billion for an otherwise prestigious organization having cumulative assets of Rs. 165 billion. The bid offered by the Blue World City was much less than the asking price of Rs. 85 billion, set by the Government, for selling 60% shares of the airlines and seriousness of the bidder can be judged by the fact that it flatly refused to raise the price and instead churned out remarks “We cannot offer more than that; the government should run this airline itself.”
The backdrop in which attempts were made to privatize the PIA and what actually happened on Thursday reflected poorly on the homework done by the relevant institutions and decisions taken by the Government to proceed ahead at all costs. Initially, six groups were prequalified by the Government but five of them retracted citing various issues and over disagreement on the conditions set for the privatization. When only one bidder was left in the arena and that too having no relevant experience at all, there was absolutely no justification to offer an opportunity to a real estate company to make mockery of the entire process because of its non-serious attitude. This shows the kind of criteria evolved by the planners to dispose of an important entity and the quality of the pre-qualification done by them and as a result the event proved to be a laughing stock and a severe blow to the privatization process. In the absence of any worthwhile buyer, cancellation of the bidding process would have averted bad publicity that the airlines and the process itself have received. A PIA spokesman has rightly pointed out that the bid offered by the Blue World City was not enough price even for a single aircraft whereas the airline has an extensive fleet, properties and assets both at home and abroad. One fails to understand why the Government wants to persist with privatization of the airlines despite poor response from the market.
Previously, a vital institution like the Pakistan Steel Mills was allowed to die because of wrong policies and approaches. Steel always remains in demand in every country and in Pakistan private steel mills are minting money but PSM collapsed due to poor management and lack of required interest on the part of the successive governments. Now PIA is being pushed to the death bed mainly because instead of focusing on reforms and making it commercially viable, all energies are directed to dispose it of in any way. It is a matter of shame that the national flag carrier, which helped establish a number of airlines in other countries that are operating successfully, has been left at the mercy of circumstances. If other airlines in the private sector are making profit then why can’t PIA, which has a robust wherewithal but for that to happen bold decisions will have to be taken in respect of different aspects of reforms required to make it a viable institution. It is the responsibility of the Government to ensure professional decision-making in PIA and duty of the staff to work hard to revive the airline. There is no doubt that the Government is under pressure from the International Monetary Fund (IMF) either to reform the state-owned enterprises or privatize them but the PIA debacle should be studied deeply by the relevant authorities and institutions. Based on this experience, the privatization policy needs to be reviewed and instead focus should now shift towards reforms and restructuring. Some vested interests are also trying to link the flopped privatization bid to the issue of Independent Power Producers (IPPs), which is not fair and the relevant Government authorities must come forward to rebut the propaganda campaign unleashed to portray IPPs as a victim whereas some of them have been fleecing the Government through different tactics.
