ISLAMABAD (Newsman): The Federal Minister for Privatization Abdul Aleem Khan has blamed the failure of privatization of Pakistan International Airlines (PIA) the Federal Board of Revenue (FBR) and former administration of Privatization Commission.
He said that the govt would re-invite the potential investors including foreign governments for taking part in the process of privatization of the national airlines after the response of IMF.
While giving briefing to the Senate Standing Committee on Privatization here on Monday, Aleem Khan said that the framework of privatization of PIA was already completed when he assumed the charge of the ministry.
The Financial Advisor of the PIA had estimated losses worth Rs830 billion of the airline. The PC had parked Rs623 billion losses to the Holding Company and Rs200 billion losses added in the PIA.
He said the authorities have wrongly decided to go for privatization with Rs45 billion losses as the total asset value of the airline worth Rs160 billion against Rs205 billion losses.
While giving another reason for failure, Aleem Khan said that the investors made requests to exempt sales tax on leasing. However, the FBR did not accept the proposal mainly due to IMF conditions.
He said that there is no example in the world of sales tax on leasing of aircrafts. This was also a reason of failure as no investor was ready to take additional burden sales tax.
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The PC has also prepared framework of privatization of PIA with losses of Rs45 billion which was another reason of failure.
“If I had made this framework, I would not have added the loss of Rs45 billion, as no investor buys any entity which is making loss,”the Federal Minister said to the committee.
He said that the govt has to learn from this failure with broad-mindedness that it can privatize the entity only after making them profitable and attractive for investors.
While giving the response on critizism, he said former ministers of the privatization commission also had been telling him how to privitize the airline.
He said that it is the best interest of the country to complete the process of privitization of PIA as soon as possible.
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While addressing to the Minister Aleem Khan, Chairman Committee Senator Talal said, “You have learn the lesson very costly, you are a head of a political party and influential federal minister, if succeeded to privatize the PIA, than you took the credit and now u must accept your failure”.
Mr Talal sai that the PC should have also transfer Rs45 billion along with Rs623 billion. This was not big issue. The privatization of DISCOs is too complex as compared to the PIA, he said.
Abdul Aleem Khan said he had informed the government he did not get any positive response from any side.
Federal Secretary Privatization Commission told the committee that that the Commission briefed about the reasons of failure to the IMF delegation on 15th Nov. The delegation was apprised that the GST on leasing was an also a reason of failure, Secretary told the committee.
He said that the IMF delegation did not respond and only said that they will comment on this issue after consultation with their high-ups in Washington.
The govt should go for privatization of PIA on mode of G2G basis after the response of the IMF on sale tax, he further said.
The secretary further said that the process of privatization will be completed within a shorter time limit as most of the steps have been completed already.