In a recent development, the government of Pakistan, led by Privatisation Minister Fawad Hasan Fawad, has announced plans to privatize Pakistan International Airlines (PIA) and the Distribution Companies (DISCOs). This move is aimed at mitigating financial losses from these state-owned entities, which currently amount to $2.5 billion annually for DISCOs alone.
The privatisation roadmap was discussed in a meeting between Fawad and World Bank Country Director Najy Benhassine on Thursday. The plan, backed by the military leadership and political stakeholders of the Apex committee of the Strategic Investment Fund Company (SIFC), aims to attract private investment, thereby liberating governmental resources for strategic sectors.
The World Bank and other institutions are expected to collaborate early in PIA's privatisation process. The International Finance Corporation (IFC) is also involved in formulating a long-term concession model for DISCOs to reduce their losses.
However, amidst these developments, PIA faced a setback as Pakistan State Oil (PSO) halted fuel supply due to unpaid dues. Furthermore, the World Bank recommended an increase in cigarette excise duty as part of its financial advice.
The comprehensive privatisation model for PIA and the long-term concession model for DISCOs are expected to be significant steps towards reducing financial losses from these state-owned enterprises. It remains to be seen how these measures will impact Pakistan's economy and the performance of these companies in the long run.
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