Daily Times

The decision by government to convert Pakistan International Airline (PIA) Corporation (PIAC) into Pakistan International Airline Limited Company (PIALC), and sale of its 26 percent shares to the private sector, created quite a stir among the political circles. Media also exhibited unmitigated interest in the issue. In the debate that raged in the media some crucial facts that provided the rationale for taking the decision were consciously or unconsciously suppressed. An impression was created that government was going for complete privatisation of the PIA, whereas the move actually pertained to resurrecting the airline running into perennial losses through selling some its shares, and finding a strategic partner from the private sector in line with internationally recognised and proven practice of public-private partnership to reverse the situation.

The issue continues to resonate in parliament. The Pakistan International Airlines (Conversion) Bill 2016 passed by the National Assembly has been rejected by the Senate where opposition parties have a majority. Government will now have to present it before the joint session of parliament to have it approved. Ironically, the Pakistan People’s Party (PPP), which is spearheading the campaign against the government decision and opposing privatisation policy of government, itself has been a leading proponent of reversing the nationalisation policy of industrial units that were nationalised by the first PPP government of Zulfiqar Ali Bhutto. During her second stint as prime minister, Benazir Bhutto privatised 20 industrial units, one financial institution, one electric power plant and 12 percent shares of Pakistan Telecommunications Ltd.

Ostensibly, the PPP and Muttahida Qaumi Movement feel hard done in the wake of the Rangers operation in Karachi, and are desperate to look for opportunities to pressurise the government to reverse its decision. The Pakistan Tehreek-e-Insaf, which has faced reverses after reverses since its rigging campaign and was struggling to revive its fortunes, has found it convenient to have another round of confrontation with the government and continue with its brand of disruptive politics. Their opposition to the government decision clearly has political motives completely devoid of economic rationale.

The ugly situation that developed in the wake of the strike observed by the PIA employees at the call of the Joint Action Committee (JAC), unfortunately, had political overtones rather than being purely an issue of trade unionism. Some of the leaders in the PIA trade unions reportedly have links with political parties who have been encouraging them to launch a protest movement against the government action. The fears expressed by employees regarding their service prospects and job security were also unfounded in view of the ground realities. Prime Minister Nawaz Sharif had personally extended the assurance that jobs, salary, pension and gratuity of every PIA employee would be secured in case a strategic investor was invited and also promised to defer the decision for six months. The Ordinance also transferred all employees of every grade and category to the company, PIACL, with the same designation and on the same terms and conditions as they held in the PIAC. The PIACL has accepted all assets, liabilities, duties and obligations of the PIAC. To make sure that the jobs of the PIA employees are not affected and PIA losses are reduced to the minimum, government has also decided to set up a subsidiary of the PIA known as Pakistan Airways where nearly 40 percent of current employees of the airline would be accommodated. The unfortunate industrial action by the JAC for two weeks resulted in the cancellation of 875 flights causing untold miseries to the travelling public besides accruing a further loss of Rs. 4.3 billion to the airline line, putting further strain on its financial position.

The strike by PIA employees failed to enlist public support for the obvious reasons and most of the employees realising the futility of their action returned to their jobs, enabling partial revival of PIA operations, which forced the JAC to call off the strike, contrary to their claims that it had done so as a result of a deal with government. The show cause notices being issued to some PIA employees therefore are absolutely justified in view of the extension of the Essential Services Maintenance Act for six month to the PIA.

To be fair to the government, it has taken a number of steps to revive PIA including doubling the fleet size to 38, profitable code sharing agreements with China Southern, Turkish Airlines and Etihad Airways, discarding of non-profitable routes, closing of a few off-line stations and opening of seven new training centres. These measures reduced the losses by 40 percent. Two more A-320 aircraft would soon be added to the fleet. However, those efforts needed to be supplemented by some more concrete steps in conformity with the economic compulsions in view of the fact that the PIA needed Rs. 3.5 billion each month to service legacy loans and pay their interest. PIA’s total liabilities have exceeded Rs. 300 billion while annual losses are hovering around Rs. 30 billion.

Another sad reality is that PIA has been in a nosedive since 1996, and since 2004, it has been continuously running into losses. The PPP, which was in power for five years, could not come up with a workable plan to retrieve the situation, and, consequently, the burden on the national exchequer continued to increase. Government is paying Rs. 400-500 billion annually to keep some of the money-guzzlers like the Pakistan Steel Mills, PIA and other industrial units; this amount is almost 25 percent of government’s revenue-collection. A resource-constrained country like Pakistan could not afford the continuation of this situation. Something needed to be done on urgent basis.

Political parties in the Opposition have a right to differ with government policies and criticise them on rational basis. At the same time, they are supposed to present meaningful alternatives to the opposed policies. In a democratic dispensation the ultimate objective of government and the Opposition has to be the strengthening of national causes and interests. In the case of the PIA what the opposition is doing is simply politics for narrow political gains.

Government programme of reforms in the State Owned Enterprises (SOEs) and privatisation of some of them has a sound economic rationale. Privatisation is not something out of this world. Many other countries including Britain have taken such decisions to rectify the economic aberrations with productive results. Similarly, a number of national carriers around the world including the British Airways are running on public-private partnership. The decision to privatise the non-profitable SOEs is economically prudent and would contribute tremendously to the rectification of distortions afflicting the economy and nudging the process of economic revival. The Opposition therefore needs to adopt a nationalistic outlook on such crucial issues. The fact is that the previous government failed to address this issue fearing political backlash, further precipitating the situation. To address the problem, tough decisions are needed to be taken in the best national interest, and if the present government is showing the spunk to resolve this festering problem, the Opposition must avoid playing the role of a spoiler or come up with an alternate and credible plan to deal with the situation.

The writer is a retired diplomat, a freelance columnist and a member of the visiting faculty of the Riphah Institute of Media Sciences, Riphah International University, Islamabad. He can be reached at ashpak10@gmail.com