Privatisation Plans: Pakistan International Airlines

Topics: Karachi, Nawaz Sharif, Pakistan Pages: 7 (1878 words) Published: September 15, 2013
Privatisation plans
Saturday, September 14, 2013 
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 The national carrier, PIA, will be privatised – reflecting the fact that, over the years, governments failed to control its decline. It has been losing Rs3.3 billion a month and the government’s hope is that the losses will be stemmed by handing over 26 percent of the shares and management control to a private entity. To make this a viable option, Prime Minister Nawaz Sharif has directed the PIA management to undertake a cleanup task so that buyers would step forward. It must be noted that airlines around the world are losing money right now because of the high international price of oil. On top of that PIA has additional issues like maintaining the highest ratio of employees to aircraft of any airline in the world. In this climate there may not be many buyers forthcoming unless they are provided all kinds of benefits and assurances. Previous administrations, like that of Pervez Musharraf, tried to sell off PIA and found there were no takers. Given the scandals that stemmed from past privatisation exercises, it is a good sign that the PM has stressed transparency and openness in the conduct of the process. This should be a priority and we hope the mechanism that is worked out will ensure this. The last thing we need is any allegations of wrongdoing or favouritism. Indeed from this point on the affairs of PIA need to be closely watched so that the path leading up to the selling of shares is not riddled with controversy or doubt. If the most likely purchasers emerge from the ruling party or their tycoon friends a disaster could be in the making. If somehow a monopoly occurs over air travel in the country, it would reek of political favouritism and patronage rather than doing what is in the best interests of consumers. The higher courts may eventually again be dragged in.

Beyond these issues is the broader question of what impact privatisation has on the economy and resources. There have been accusations in the past that by privatising giant national entities, such as PTCL, the national cupboard is being stripped of its silver, leaving nothing behind for a rainy day. These accusations flew most memorably during the term of Shaukat Aziz. They may come up again, even though many had become increasingly convinced that there was little real option left other than to sell off PIA and allow it to enter the private sector where management might be more efficient and geared towards ensuring profits instead of endless losses. Yet, it can be argued that privatisation has often been an abdication of duty by a government that wants to save money in the short term and that, instead of trying to privatise PIA – which would likely lead to costly routes to remote parts of the country being shut down – it would be in the national interest to reform the way the airline is run. At the end of the day it is good and professional management that matters, not who owns the company. Now that a decision has been taken, there will be problems along the road. The question of layoffs will inevitably arise. The matter of subsidies still given by the state on certain routes will also come up. All this lies ahead and only after it is over will we be able to tell what benefits privatisation brings and what impact it has on us. Policing Karachi

Saturday, September 14, 2013 
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 The challenges facing the federal government in bringing peace to Karachi were underlined yet again when the PPP-led provincial government made a rash of transfers in the Sindh police. It may appear that these transfers have one aim: to ensure that the uppermost positions in the police are held by men who have a history of taking on the MQM. By far the most significant – and possibly controversial – of the transfers is that of Shahid Hayat Khan, who has been made the chief of Karachi police. Hayat was involved in operations against...
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