The Cabinet Committee on Privatisation (CCoP) has directed the Aviation Division to immediately complete corporatisation process of PIAC and seek ownership of Pakistan Airways Limited, the newly establish company, from the Finance Ministry, sources close to Chairman Privatisation Commission (PC) told Business Recorder.
The decision was taken by the CCoP, in its previous meeting presided over by the Finance Minister, Senator Ishaq Dar. However, Finance Division is reluctant to transfer the control of company to Aviation Division.
The sources said, on May 7, 2016 Privatisation Commission said that the CCoP in its meeting held on October 3, 2013, approved the privatisation of Pakistan International Airlines Corporation (PIAC) along with restructuring, followed by divestment of 26 per cent GoP equity stakes to a strategic partner along with management control( transaction) as part of privatisation program for early implementation.
The PC Board in its meeting held in January 2014 approved the appointment of a consortium (Financial Advisors) comprising M/s Dubai Islamic Bank, IATA Consulting, Deloitte, Haidermota BNR, Freshfields Bruckhaus Deringer, Abacus Consulting, APCO, and Prestige.
The FAs, in their inception report submitted in February 2015, recommended the conversion of PIAC, a statutory corporation functioning under the PIAC Act, 1956 into a public limited company under the Companies Ordinance, 1984.
The CCoP was updated that an Ordinance was promulgated on December 4, 2015 to provide for turning of PIAC into a public limited company. After the enactment of the PIAC (Conversion) Bill, 2016 on April 15, 2016, the PIAC stands converted into Pakistan International Airline Corporation Limited (PIACL), a company deemed to be successor-in- interest of PIAC.
The PC requested the CCoP to review and amend its (CCoP) decision of October 3, 2013 which is as follows; (i) PIAC is replaced by its successor-in-interest entity namely PIACL in the privatisation program and ;(ii) restructuring followed by divestment of 26 per cent GoP equity stakes to strategic partner with management control in replaced by divestment of GoP shareholding in PIACL and / or any of its subsidiaries in accordance with the provisions of PIAC( Conversion) Act 2016 in the privatisation program for early implementation.
The Aviation Division informed the CCoP that the process for enforcement of the PIAC (Conversion) Act, 2016 could still not be initiated by the Aviation Division. It was observed that the conversion of the PIAC into a company was essential for the transfer of the operations to the PIACL from the PIAC and to ensure better performance and to enhance the operational capacity of PIAC.
According to sources, CCoP considered the summary of Privatisation Division regarding amendment in its earlier decision for PIAC transaction and directed the Aviation Division as follows; (i) corporation process should be completed within two weeks. SECP will provide full assistance for this purpose; (ii) Aviation Division may finalise a decision on separation of core and non-core business and complete the requisite steps accordingly and; (iii) Aviation Division may seek transfer of the newly established company.
An official told Business Recorder that progress on the decision of the CCoP is not encouraging as all the concerned public sector stakeholders are slow in implementation of decisions taken at different high-level forums.