Govt to move ahead with PSM, PIA divestment

May 9, 2016 at 3:17 pm

ISLAMABAD: Finance Minister Ishaq Dar will join the prolonged pre-budget talks with the International Monetary Fund (IMF) in Dubai on Tuesday, and is expected to report that the government would be moving ahead with the divestment of Pakistan Steel Mills (PSM) after June 10, to be followed by Pakistan International Airlines (PIA).

A senior government official told Dawn that Mr Dar was given an overview of the state of affairs at the two loss-making entities on Saturday, ahead of policy-level negotiations with the IMF mission, starting on May 10. He said the finance minister had to chair back-to-back meetings of the Cabinet Committee on Privatisation and the Economic Coordination Committee of the federal cabinet, whose outcome was required to be reported to the IMF.

On his return from Dubai, Mr Dar is expected to initiate the process for presentation of the federal budget, as no schedule has yet been finalised for meetings of the Annual Plan Coordination Committee (APCC) or the National Economic Council (NEC) for the presentation of the budget in the National Assembly, the official explained.

He said the government was wary of the political reaction to the divestment of PIA, given the cooperation emerging among opposition parties following the Panama Papers controversy, adding that it wanted a formal ‘yes or no’ response from the Sindh government over whether the province was interested in taking over the PSM.


Ishaq Dar to inform IMF of plans at pre-budget talks in Dubai tomorrow


Officials said this was apparent from the low levels of participation of PIA stakeholders at a meeting of the Cabinet Committee on Privatisation on Saturday. As chairman of the committee, when Mr Dar took up matters pertaining to PIA and asked stakeholders to make their representation, it became clear that no-one from the PIA board or management was present.

It was reported that a representative from the Civil Aviation Authority (CAA) was in attendance, but he did not have the authority to report any progress or discuss policy issues. Mr Dar asked for an update over steps required to be taken following the passage of the bill to convert the PIA Corporation into a public limited company, to complete the spadework in the run-up to divestment.

“The responses were not satisfactory. There was no progress to report,” said an official of the Privatisation Commission.

The official said the finance minister wanted Privatisation Commission Chairman Mohammad Zubair to take personal interest in the matter. Mr Dar also advised the Securities and Exchange Commission of Pakistan (SECP) to help PIA complete the formalities so that the process of divestment could move forward.

“There seemed to be no urgency in pushing through the PIA divestment,” the official said, explaining that Mr Dar, unlike his usual way of doing things, did not give a deadline but asked the CAA official to ensure the submission of a compliance report on the completion of all actions required following the passage of the PIA conversion bill, as soon as possible. The CAA official, sources said, promised to convey the finance minister’s instructions to the relevant authorities.

On Pakistan Steel Mills, officials said Mr Dar sought an update from the Privatisation Commission on the Sindh government’s response whether it was interested in taking over the mills.

Mr Dar was informed by the commission that there was no formal reaction to the federal government’s offer. “Let us move forward, but get something in writing from them (the Sindh government) first,” Mr Dar was quoted as saying.

The minister also asked the Privatisation Commission chairman to send to the province another reminder by June 10, after which the federal government would move ahead with the divestment process.

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