Are Pakistan’s Strategic Assets at Stake?

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By Afshain Afzal

A high-ranking official from the Indian Ministry of External Affairs (MEA) on the condition of anonymity claims that soon strategic asset of Pakistan’s national flag carrier will be in the Indian lap. The national level shock by fraud of Abraaj Group (Mumbai, India) with regard to K Electric was sufficient an eye opener for the Pakistani state authorities to enforce and maintain transparency and accountability while privatizing national strategic assets or going for any public private partnership. But it seems all are intentionally ignoring everything. As citizens of Pakistan, the nation has the right to know where strategic assets are going and who will be the owners. It is too early to say with confidence what is happening but things are not straight. Pakistani nation would like to know that in case of foreign company or a consortium have the companies cleared the security test? To avoid money laundering and frauds, the litmus test for any new shareholder should be an undertaking how much foreign exchange would be transferred to Pakistan through National Bank of Pakistan, after acquiring the assets. Interestingly, earlier the Government of Pakistan hinted to privatise all the state-own enterprises (SOEs), apart from ‘strategic entities’ while another statement by the Finance Ministry says there are no “strategic state-owned enterprises” and “the concept of a strategic SOE does not exist.” Should there be a need for clarification if Pakistan does not have strategic entities?

It is a strange sale where that PIA’s majority shares (51% to a complete 100% shares) as not only national flag carrier but this strategic asset will be sold to an international equity partner, and management will be outsourced. PIA is projected as a sick institution and total liability on Government. Interestingly, PIA’s retired employees were shifted to the PIA Holding Company, so that the pension disbursement to the retired workers should not be hindered due to the holding company. There is a provision of government’s sovereign guarantee, obliging it to pay PKR262 billion (USD912 million) in case of default by the airline. Some criminal in the past crossed all limits to tannish the nations image giving vast publicity to scandal over fake pilot licenses in 2020. This led banning of PIA by the European Union, the United Kingdom, and the United States of America and others, which was followed by conduct of an on-site audit of the Pakistan Civil Aviation Authority (PCAA) by the European Union Aviation Safety Agency (EASA) is to in September 2023. In October 2023, flights were resumed. The main reason behind the losses in the past included PIA’s un-rationalized concessions and rebates to serving and retired, Armed Forces personnel and their spouses, serving, retired and deceased employees of PIA and their families including regular, contractual, on deputation, senior citizens, disabled persons and long list of others. The issue is corruption and un-rationalized policy not the concessions.

Those who have submitted their Statements of Qualification include Fly Jinnah (presented by Arif Habib Corporation), Airblue Limited, Shonksi China CIG Ltd, Jiri International Pvt Ltd, Younis Brothers Holdings Consortium, Pak Ethanol Consortium, and Blue World City Consortium. It is alarming that various data floating about some of these potential entities are fake and lack authenticity or confirmation by even the organizations which even published the data or where registered. Reports say that Pak Ethanol Limited Pakistan is the co-lead entity with other consortium members in the purchase of Pakistan International Airlines including Switzerland’s Swiss Aviation Group AG, Austria’s Airport Competence, Australia’s Pearl Asset Management, Hong Kong's AsiaPak Investments Limited, Malaysia's Air Asia Aviation Group, and Pakistan’s Serene Air and Air Sial Ltd. In 2021, Air India along with its low cost carrier Air India Express and fifty per cent of AISATS, a ground handling company, were sold for US$2.3 billion to Tata Group, which is most railable. But the reliability of the entities are yet to be ascertained. One doubt if these entities have been vetted beforehand. Pakistani authorities still have the time to revisit the sale; who all are acquiring, what benefit nation will get and has all precautions for securing strategic and national interests have been taken? (The authorities may get further details of misleading data used by some of these entities).

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