As PIA Strike enters its third day causing an estimated PKR 1.8 billion loss to the national flag carrier, the International Monetary Fund (IMF) has agreed to delay PIA privatization by a period of six months. This particular understanding between Pakistan and IMF was reached during the last round of talks between the two parties. The talks were successful on various accounts including the fact that IMF approved $497 million tranche for Pakistan. Furthermore, IMF agreed to relax the condition of inviting Expressions of Interest (EoIs) from bidders regarding PIA privatization till 15th May 2016. This understanding is still subject to approval by IMF management and executive board however.
The IMF and the government of Pakistan had an understanding to move forward with PIA privatization along with Pakistan Steel Mills (PSM) and Faisalabad Electricity Supply Company (FESCO). The government’s failure to move ahead with the schedule was criticized by the IMF. The understanding to delay PIA privatization however can be accorded to the massive protests staged by the airline’s employees and deaths of two protestors on Tuesday. The Chairman of Privatization Commission of Pakistan Mr. Muhammad Zubair proposed to the Prime Minister that instead of a confrontational approach towards resolving issues, a committee should be set up and PIA union leaders should be invited to the table for talks. All previous efforts by the government to engage PIA union leaders in talks have failed.
Under the $6.2 billion IMF loan program, Pakistan was legally bound to invite investors to participate in PIA privatization through media by 31st December, 2015. PIA was supposed to be privatized by June 2016. These terms have now been relaxed according to the officials. PIA suffers massive losses as the protests move on. Moreover, passengers with PIA’s tickets are stranded in several regions across the world. PIA thus far has only moved forward to rent out four jumbos to bring back the pilgrims. If the government fails to bring PIA union leaders to the table for talks and negotiation, chances of the protests dying are extremely thin.You can follow us on Facebook, Twitter, or Google+ for more updates. Otherwise fill in the subscription box above, or subscribe to our RSS Feed.