Pakistan's PIA dilemma |
The privatisation of PIA illustrates a fundamental dynamic in which public resources are transferred to private ownership under the guise of reform and efficiency. While the government portrays the sale as a decisive break from decades of losses and inefficiency, a closer examination reveals that the transaction primarily shifts the burden of risk to the public while concentrating potential benefits in the hands of a few private actors.
By splitting PIA into a holding company carrying Rs650 billion in legacy liabilities and a "clean" operating entity sold to a consortium led by Arif Habib Corporation, the government created a superficially attractive asset for private investors. The transaction allowed the state to claim progress while retaining most of the financial burden.
Only about Rs10 billion of the Rs135 billion headline value accrued as cash to the state. The remainder was injected into the airline as equity. The government also retained a 25% stake, valued at roughly Rs45 billion. Against the Rs650 billion of retained debt, the net fiscal........