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 was not the mandate of the Special Investment Facilitation Council (SIFC) and that he only briefed the council about the PIA being a critical transaction.

However, he said, there was no deadline for PIA privatisation but it would be done as early as possible.

The minister also shared details of the losses that the PIA caused due to years of mismanagement. He added that the cost of running the PIA in losses since 2012 was $7.1 billion - enough to build a Diamer Bhasha dam, or 10 public sector universities as big as International Islamic University Islamabad.

'We have a choice either to privatise the loss-making entities or not to run them due to lack of fiscal space,' the privatisation minister told the reporters. However, he expressed that he would try his best to keep...