A debt-free PIA to go under the hammer.

ISLAMABAD -- The caretaker government announced its decision on Tuesday to privatise the Pakistan International Airline (PIA) after making it debt-free, but put brakes on the strategic sale of the Pakistan Steel Mills (PSM) and the power distribution companies (DISCOs) due to severe complications in these transactions.

Talking to the media persons here, Caretaker Privatisation Minister Fawad Hasan Fawad gave an in-depth review of the privatisation status of the highest lossmaking entities and the reasons for not immediately offering DISCOs for sale.

'It has been decided that the PIA would be privatised as a clean entity by making it free from legacy loans,' Fawad said. 'The Pakistan International Airline Company (PIAC) as a clean entity with only current core assets and current liabilities would be offered for privatisation,' he added.

Fawad, who was flanked by Information Minister Murtaza Solangi and Privatisation Secretary Mujtaba Memon, told reporters that no bank was ready to give any new loan to the PIA even on the federal government's guarantees despite the airline's minimum monthly loss is Rs12.8 billion.

Read PIA sell-off a foremost priority, WB told

The minister said that PIA's legacy liabilities would be parked in a holding company. He added that the core assets that would be sold included PIA aircraft, its routes, landing rights, core engineering and air service agreements.

The national-flag carrier has 34 aircraft, but the minister said that out of those only 19 were flying. Fawad lamented that out of the 15 aircraft currently grounded, six of them were leased by the PIA and incurring a monthly charge of $2 million.

To a question, Fawad said that the privatisation...