Business

Govt trying to find Rs8bn loan guarantees for PIA

Published

1 year ago

Farwa

After flight cancellation, PIA is now announcing only those flights for which fuel has been procured.

PIA has 34 aircraft in fleet, out of which two are inoperative.
PIA’s revenue has declined to Rs300m.
Airline spox says 15 int’l flights, 7 domestic flights to depart today.

ISLAMABAD: As Pakistan International Airlines (PIA) suffers from 70% decline in revenue after the cancellation of over 600 flights, the Finance Minister has been scrambling to get Rs8 billion loan guarantees to remain within the International Monetary Fund’s (IMF) agreed limits, The News reported quoting sources.

According to the sources, the national carrier experienced a huge decline — around 60% to 70% — in its daily revenue. The airline generated around Rs700 million Rs800 million, which has now reduced to Rs300 million.

There are 34 aircraft in PIA’s fleet, out of which two planes are inoperative because of different reasons. Meanwhile, the airline also doesn’t have the finances to meet its fuel requirements. Following flight cancellation, the national air carrier is now announcing only those flights for which fuel has been procured, as it will ensure operation without any delay.

Last week, the ECC had approved a bridge financing of Rs8 billion through CAA resources that would be used for payment of $25 million liabilities owed to Malaysia for procurement of two aircraft. There was an outstanding amount of $30 million but after tough negotiations, PIA convinced them over payment of $25 million.

PIA had sought Rs24.6 billion for its operational expenses from the government of Pakistan. The Ministry of Finance had initially rejected the demand for this injection on the basis that in the past, PIA came up with financial injections with the commitment to undertake restructuring plan but it was never implemented.

The Privatisation Commission is making all-out efforts to accomplish all required procedures for going ahead with privatisation till December or January. It is yet to be seen how speedily they would be able to accomplish all the spadework and procedures without compromising the objective of transparency.

It would be an uphill task to accomplish the PIA transaction but also keep its operation intact. If it reaches to point of shutdown in its existing shape, its privatisation will not produce the desired results.

The Ministry of Finance has been working on creating a fiscal space and would provide its nod in the shape of guarantees for generating loans of Rs8 billion.

“We might be able to jack up all financial injections up to Rs15 billion but it’s too early to share precise numbers,” said one official, adding that the outcome of the ongoing exercise would be determined this week. The total guarantee limit for PIA stood at Rs262 billion, which was exhausted but later on the airline paid back its outstanding loans. So there was room available to the tune of Rs8 billion at the moment.

There is no easy solution for cash-bleeding PIA in sight but it should be privatised in a manner that it remains afloat for the next three to six months.

PIA to operate 22 flights today

Meanwhile, the PIA spokesperson said that the airline will operate 22 domestic and international flights today. However, 29 flights have also been cancelled today due to the overall situation.

Speaking with Geo News, the spokesperson said that 15 international flights and seven domestic flights will depart today.

“PIA’s flight operations are improving,” the spokesperson said.

Business

SFD and Pakistan Sign Two Deals Totaling $1.61BLN

Published

2 days ago

Farwa

Two agreements totaling $1.61 billion have been inked by Pakistan and the Saudi Fund for Development to improve their bilateral economic cooperation.

Business

Saudi Arabia and Pakistan sign an MOU to strengthen their auditing industry collaboration.

Published

2 days ago

Farwa

A spokesperson for the office of the Auditor-General of Pakistan (AGP) announced on Monday that the two countries have signed a Memorandum of Understanding (MoU) to strengthen cooperation in public sector auditing through improved cooperation between audit institutions of both countries, as well as training programs and the exchange of trainers.

This comes as a group from Saudi Arabia’s General Court of Audit (GCA), headed by GCA President Dr. Hussam bin Abdulmohsen Alangari, arrived in Pakistan on Sunday for a four-day visit.

The agreement was signed during AGP Muhammad Ajmal Gondal’s meeting with the Saudi delegates, aiming to strengthen audit cooperation, enhance knowledge-sharing, and improve governance, transparency and accountability in government spending.

Public relations officer Muhammad Raza Irfan of the AGP’s office told Arab News that the deal will further advance bilateral collaboration between Saudi Arabia and Pakistan in addition to enhancing professional ties between the two nations’ auditing institutions.

In a statement released from his office, AGP Gondal was cited as saying, “This collaboration marks a significant step toward fostering international cooperation in auditing.”

“The exchange of ideas and methodologies will undoubtedly strengthen our capacity to meet emerging challenges and set new benchmarks for public accountability.”

Discussions at Monday’s meeting focused on fostering closer ties between the Supreme Audit Institutions (SAIs) of Pakistan and Saudi Arabia, sharing innovative audit methodologies, and planning collaborative initiatives for the future, according to the AGP office.

The two parties decided to increase their knowledge of theme, environmental, and impact audits as well as to exchange best practices in audit standards, performance audits, and citizen participation audits.

The statement added, “It also agreed to exchange trainers, address new auditing challenges, plan cooperative audits, including a performance audit on the oil and gas sector in 2025, and work together on training programs.”

Both sides reaffirmed their shared commitment to promoting transparency, accountability and excellence in public sector auditing.

Business

The government chooses to continue the PIA privatization process.

Published

2 days ago

Farwa

The Pakistan International Airlines (PIA) privatization process will be restarted by the federal government, and expressions of interest would be requested within the month. Officials stated that the Prime Minister’s Committee on Privatization will convene to make the final decision.

Usman Bajwa, the secretary of the Privatization Commission, gave a briefing on the updated procedure to the National Assembly Standing Committee on Privatization. Additionally, he disclosed that airlines other than PIA are now able to compete with regional carriers thanks to IMF-approved aircraft tax concessions.

Farooq Sattar, the chairman of the privatization committee, underlined the importance of giving PIA workers at least five years of job security. Employee protection will continue to be a top priority and will be resolved prior to bidding, the Privatization Commission promised.

PIA’s liabilities totaling Rs650 billion have already been assumed by the government, and an additional Rs45 billion in outstanding debts must be paid before the privatization process can begin. As of the now, PIA has assets around Rs155 billion and liabilities worth Rs200 billion. It will be necessary for the new buyer to expand the fleet by 15 to 20 aircraft.

Additionally, the Privatization Committee has sought a timeline for the privatization of Faisalabad, Gujranwala, and Islamabad Electric Supply Companies. Officials stated that after the appointment of a financial advisor, the privatization process for these companies will accelerate.