PIA sale blocked by new governmental legislation

Having accumulated losses in the region of US$3 billion, attempts by Pakistan’s ruling party, under Prime Minister Nawaz Sharif, to offload the cash-strapped national carrier, Pakistan International Airlines (PIA), have finally been shelved. In what has been described as a compromise to appease opposing parties and trade unions, the Pakistani parliament has adopted a law that will convert the struggling airline into a limited company.
The government had been facing an uphill struggle to meet the deadline to offload the carrier and had for several months sought to have a 1956 law barring it from being privately owned amended. However, a joint session of the upper and lower houses of the Pakistani parliament succeeded in passing a bill that effectively stops any sale of the airline. Converting it to a limited company will instead hopefully achieve a more efficiently run business with the government forced to hold a majority 51% of the company shares.
The new law states: “”Management control of the company and any of its subsidiary companies… shall continue to vest in majority shareholders, which shall be the federal government and whose share shall not be less than 51 percent.”
According to the chairman of the Privatisation Commission, Mohammad Zubair, “We have agreed with the opposition parties that PIA will not be privatised. It is only being converted into a private entity to ensure more efficient running.”