ISLAMABAD: Pakistan and the World Bank on Thursday discussed privatisation of Pakistan International Airlines (PIA) and other State-Owned Enterprises (SOEs).
A significant meeting took place in the federal capital between Pakistan’s Minister for Privatisation, Fawad Hasan Fawad, and the World Bank Country Head, Najy Benhassine.
Minister Fawad Hasan Fawad discussed the privatisation agenda of the caretaker government, focusing on the privatisation of PIA and other State-Owned Enterprises (SOEs). The goal is to enhance the performance of Distribution Companies (DISCOs) and reduce the fiscal burden on the government.
Minister Fawad emphasized that the Federal government, along with all institutional stakeholders, has reached a consensus on the privatisation of major loss-making SOEs, which are already on the privatisation list. These entities have been significantly straining government resources.
PIA has been identified as the top priority for privatisation due to its ongoing and substantial financial losses, amounting to billions of rupees annually. The privatisation of PIA is considered essential to address these losses and improve operational efficiency.
Minister Fawad Hasan Fawad outlined the PIA privatisation plan, expressing the government’s intention to involve the World Bank and other financial institutions in the initial stages of this initiative. The overarching goal is to attract much-needed private investment through the privatisation process, freeing up government funds for deployment in critical sectors. Additionally, the Minister highlighted plans to develop a comprehensive model for PIA, with the World Bank as a key partner for potential future support.
The Federal Minister also discussed the significant annual losses incurred by Distribution Companies (DISCOs), which currently amount to a staggering $2.5 billion. Two productive sessions with the International Finance Corporation (IFC) have already taken place, focusing on developing a long-term concession model to mitigate these losses. Ongoing discussions with the IFC are expected to lead to a concrete strategy for private sector involvement in the DISCOs, with the primary goal of privatisation to reduce losses and enhance performance.
The meeting encompassed a broader range of support areas, including advisory and legal assistance, which are considered crucial to ensuring the successful execution of the privatisation process.
The meeting between Federal Minister for Privatisation, Fawad Hasan Fawad, and World Bank Country Head, Najy Benhassine, concluded with a mutual commitment to cooperation in addressing the pressing financial challenges posed by PIA and DISCOs.
