PIA assets in focus as cash strapped Pakistan adopts drastic measures to raise funds

Pakistan is working double fast to raise funds to keep its sputtering economy on track. In the latest development, it has kick-started the process to outsource operations of its Karachi, Islamabad and Lahore airports.

On Thursday, the Pakistan Civil Aviation Authority (PCAA) informed the parliamentary standing committee on aviation that the government has initiated the process to give the management and operations of these airports in a bid to shore up forex reserves. The PCAA added that it was not selling the airports but only outsourcing services, reports Dawn.

Besides raising forex through this decision, another reason for outsourcing was to curb numerous inefficiencies that had come up in the management of the airports. These included illegal constructions, increasing bird hits, and the death of a Pakistan International Airlines (PIA) air hostess due to safety issues.

PIA has been running into problems with international aviation agencies as well as other airports in other countries over multiple failures.

The PIA has been ailing for many years and the various governments in Islamabad have been trying to find a way out of the mess by selling various properties and assets of the PIA over the years. However, in Pakistan’s topsy turvy world of governance, the ministers have also been simultaneously denying that the country’s assets are being hived off.

In the latest, the country has sold its abandoned embassy building in Washington for $7.1 million. The building which had become a liability for the government had been declared “blighted property” by the municipal authorities in Washington recently. It has finally been bought by a member of the Pakistani diaspora partly as a matter of pride for the government.

Also to go in the US is the Roosevelt Hotel in Manhattan, New York. It was leased to the New York City Health and Hospitals Corporation in May this year, which now plans to use it for housing migrants.

The iconic 19th century building had been with PIA since the 1970s but due to mismanagement and rising renovation costs, Pakistan’s national airlines could not manage to hold it. In a bid to stem the losses the government eventually leased it out for an initial three years. The Covid pandemic turned out to be the last nail in the coffin for the heritage building.

Late last year, PIA decided to give its seven spots at London’s Heathrow Airport (LHR) to Turkish and Kuwait Airlines for an initial six months. The drastic decision was taken not so much to raise money but to ensure that Heathrow did not cancel the spots due to sanctions on PIA by the European Union and the UK. To avoid losing the spots, PIA had to sublet these to Turkish and Kuwaiti airlines. PIA would have then been given smaller airports in the UK, which would have been a big embarrassment for the government.

With Pakistan tottering on the brink of a financial collapse, the Pakistani Army has been helping the Shehbaz Sharif government in managing the finances and coming up with ideas to raise money.

Pakistan’s Chief of Army Staff (COAS) General Asim Munir sits on the Special Investment Facilitation Council (SIFC) set up by Prime Minister Shehbaz Sharif, to help him not only generate ideas but also implement these to invite foreign investment.

The all-powerful army recently suggested that the country can give corporate farming projects to the Gulf countries in return for advance funds. This would benefit both as the Gulf countries have been scouting for food security while Pakistan can bail itself out of the economic crisis.

Only a few weeks back, the country also signed a 50-year agreement with a UAE company to operate and develop some of the berths at the Karachi Port. The UAE company – AD Ports, will invest $220 million in infrastructure development at berths 6-9 at the Karachi Port Terminal.