The International Monetary Fund (IMF) has given its stamp of approval to the privatisation initiative for Pakistan International Airlines (PIA), a move that could potentially reshape the nation's aviation landscape.
Sources privy to the negotiations have revealed that fruitful deliberations between the Ministry of Privatisation and the Ministry of Finance have culminated in the IMF granting in-principle approval for the rescheduling of loans, a pivotal step towards privatizing PIA.
The final nod for PIA's debt restructuring plan is expected to be sought from the federal cabinet. According to plans outlined by the Privatization Commission and the Finance Ministry, the IMF has greenlit the blueprint for PIA's privatization.
Under the terms discussed, the IMF has consented to cover the interest on PIA's loans for one year. It has been agreed that the Government of Pakistan will assume the responsibility of repaying the staggering 280 billion rupee loan to commercial banks at a 12 percent interest rate over one year.
Highlighting the IMF's stance, sources indicate that the burden of interest payments on PIA loans should not extend beyond the one-year mark, a sentiment echoing the need to alleviate strain on financial institutions.
With the privatisation process set in motion, a comprehensive loan repayment strategy is anticipated to be formulated within the stipulated one-year timeframe.
Post-privatisation, discussions are slated to focus on devising a repayment scheme leveraging dividends from Velet Hotel and PIA.
Pending cabinet approval, the privatization drive is poised to gain momentum, aimed at expediting the cessation of charges on PIA by commercial banks. Continued engagements with the IMF are on the agenda this week to iron out further details pertaining to the PIA debt rescheduling plan.
ECP puts brakes on PIA privatisation
Earlier on Monday, the Election Commission of Pakistan (ECP) put a halt to the caretaker government's attempts to privatize national assets, specifically Pakistan International Airlines (PIA).
The ECP, in a stern letter addressed to the Cabinet Secretary, invoked Article 230 of the Constitution, delineating the scope and constraints of the caretaker government's authority.
