Bill To Turn PIA In To Company Adopted

After over four months of political wrangling, the PIA bill seeking conversion of the national airline from corporation to a limited company finally sailed through a joint sitting of parliament on Monday.

The house adopted an ame­nd­ed Pakistan International Airlines Corporation (Conversion) Bill 2016 after opposition parties agreed to vote for it following a written assurance and announcement by Finance Minister Ishaq Dar that all show-cause notices, suspension and transfer orders against employees of the airline stood withdrawn whereas the court cases would be withdrawn through due process of law.

PIA Air Line
Bill to turn PIA into company adopted

The government and the opposition parties had already reached a consensus on the draft of the PIA bill at a meeting of a 10-member special committee, headed by Law Minister Zahid Hamid, on April 6. The opposition parties, however, had linked their vote for the bill to the withdrawal of termination and show-cause notices issued by the PIA management to over 200 employees for bringing the airline to a halt amid a protest in February against the proposed law fearing the privatisation of the airline. Defending the bill, the government had been stating that it had no plan to privatise the airline and the conversion was only aimed at bringing it out of the control of bureaucracy and to improve the financial health of the national carrier. According to the government, the step was necessary as PIA had accumulated liabilities of over Rs320 billion while its fleet of aircraft had gone down to 18, which has now been increased to 40 planes acquired through wet and dry lease. 

The law will now allow the government to park PIA’s liabilities and surplus staff with a new entity and enable the divestment of up to 49 per cent shares to the private sector. A 10-member bipartisan Committee of the Joint Sitting on Bills had been constituted by National Assembly Speaker Sardar Ayaz Sadiq last month to review drafts of six bills, including the PIA bill, when the opposition parties forced the government to defer consideration of the bills for three weeks. When the two houses of parliament assembled on Monday, the opposition members, soon after presentation of the committee report on the bill by Law Minister Zahid Hamid, refused to vote for the bill, saying they would not accept any verbal assurance by the government about withdrawal of notices to the PIA employees. Opposition Leader in Senate Aitzaz Ahsan said that due to the past track record of the government, they had “no trust” in the ministers’ verbal assurances.

He said the opposition was ready to vote for the bill, but only after a written commitment by the finance minister. Mr Ahsan’s speech infuriated the finance minister, who said that the government had already shown flexibility despite the fact that it had a majority in the parliament to get the proposed law passed without the opposition’s support. Sensing that the situation might go out of control, the speaker asked both the parties to go outside the chamber and settle the issue. And it was after some two hours’ discussion that the finance minister agreed to give a written commitment. The consensus on the PIA bill was reached when the government agreed to include a number of amendments proposed jointly by the Pakistan People’s Party (PPP) and the Pakistan Tehreek-i-Insaf (PTI) to ensure that the proposed law would not be used as a tool in future to privatise the national carrier and that the rights of the employees would be safeguarded after PIA’s conversion into a company. 

Read More: Govt suspends PIA employees right to protest

The government had agreed to incorporate the opposition’s suggested major amendment that the management control of the PIA would continue to remain in the hands of the federal government and that it would not be able to divest more than 49 per cent shares to any third party. A new sub-clause 4 with an explanation added to Clause 4 of the bill says: “Representation on the Board of Directors and all other rights and privileges of shareholders of the company, or any of its subsidiary companies carrying on air transport business, shall be proportionate to their share-holding.” The explanation attached to the sub-clause reads as “Management control of the Company and any of its subsidiary companies in the above circumstances shall continue to vest in majority shareholders, which shall be the federal government and whose share shall not be less than 51 per cent”. Another new sub-clause added to the bill says:

The federal government shall carry out or cause to be carried out valuation of assets of the company, and its subsidiary companies carrying on air transport business, by a recognised valuator before transferring any shares of these companies to a third party.” Defending the bill, the government had been stating that it had no plan to privatise the airline and the conversion was only aimed at bringing the airline out of the control of bureaucracy and to improve the financial health of the national flag carrier. According to the government, the step was necessary as the PIA had accumulated liabilities of over Rs320 billion whereas its fleet of aircraft had gone down to 18, which has now been increased to 40 planes acquired through wet and dry lease. The law will now allow the government to park PIA’s liabilities and surplus staff with a new entity and enable the divestment of up to 49 per cent shares to the private sector.

Talking to Dawn, PPP’s Parliamentary Leader in the Senate Saeed Ghani termed the passage of the amended PIA bill a victory for the opposition parties which, he said, had successfully blocked the government’s initial plan to privatise the airline. Moreover, he said, the opposition had also managed to include a certain provisions in the law seeking to safeguard and protect the rights of the employees of the airline. “All employees of the corporation shall be deemed to be employees of the company on the same remuneration and other conditions of service, rights and privileges, including but not limited to the provisions as to their pension, provident fund and gratuity, as the case may be, and other matters as were applicable to them before the conversion, including all existing retirement benefits of the employees whether funded or non-funded,” says Clause 3(6) of the bill, which now requires only a ceremonial assent of the president to become an act. 

The Statement of Objects and Reasons attached to the bill states: “In recent years, the airline has not been able to fulfil its statutory mandate. It has been incurring huge losses and has become a burden on the national exchequer. The airline has also failed to provide quality of services deserved by the people of Pakistan as mandated by the law.” It states that “this conversion will enable the government of Pakistan to revitalise the airline and develop a healthy and competitive aviation sector in Pakistan”. The government had initially imposed the PIA law through a presidential ordinance in December last year, setting off strike by PIA employees and protests by opposition parties. The ordinance was later rejected by the opposition-dominated Senate through a resolution, forcing the government to take advantage of its numerical strength in the National Assembly and convening the joint sitting to get the bill passed. 

Read More: PIA privatisation bill sent to NA amid opposition

The last joint sitting was held on March 21 and 22, but the government agreed to adjourn the joint sitting till April 11 in an effort to develop a consensus on the PIA bill. Meanwhile, the joint sitting of the parliament also approved three other bills which had been passed by the Senate, but could not acquire the shape of an act due to failure of the government to get them passed through the National Assembly within the stipulated 90 days. The bills passed by the parliament are Emigration (Amendment) Bill, 2014; the Civil Servants (Amendment) Bill, 2014 and the Privatisation Commission (Second Amendment) Bill, 2015. The house, however, deferred consideration of the two pro-women bills – the Anti-Rape Laws (Criminal Laws Amendment) Bill, 2015 and the Anti-Honour Killings Laws (Criminal Laws Amendment) Bill 2015 – due to lack of consensus. Though the government and main opposition parties had agreed on the two bills, they agreed to defer the proposed laws in order to get the religious parties on board.