Pakistani government distances itself from new plane purchases of PIA
Finance Ministry adviser Khurram Shahzad has clarified that the
government has not announced any loan or sovereign guarantee to finance the
purchase of new aircraft for the privatised Pakistan
International Airlines (PIA).
In a statement posted on X, Shahzad said the government was
neither purchasing aircraft for PIA nor providing an announced sovereign
guarantee or taxpayer-funded loan for the airline’s aircraft financing.
He said some commentary surrounding the issue appeared to
conflate the process of privatisation with the role of export credit agencies.
According to the adviser, the US
Export-Import Bank (US EXIM), like other export credit agencies, supports
American exports and employment by facilitating financing for foreign
purchasers of US-manufactured goods, including aircraft purchased by airlines.
Shahzad said US EXIM’s financing framework can provide
asset-backed aircraft financing, under which loans may be secured against the
aircraft itself. Credit assessments can also be based on the airline, lessee or
another guarantor, where applicable.
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“A sovereign guarantee is therefore not an automatic
requirement,” he said.
Government
role
Shahzad said the government’s role was to facilitate access to
international financing, technology and suppliers while encouraging investment
and commercial opportunities, rather than directly financing PIA’s aircraft
purchases.
He added that Finance Minister Muhammad Aurangzeb’s engagement
with US EXIM was broader than PIA and included potential financing
opportunities in sectors such as aviation, refinery upgrades and the Reko Diq
mining project.
The discussions, he said, formed part of wider Pakistan-US
economic engagement.
Privatisation
and private-sector investment
The finance ministry adviser said the government’s economic
policy was focused on reducing the state’s role in commercial activities,
advancing privatisation and creating greater room for private-sector
investment.
He said a private-sector-led growth model did not mean the
government would disengage from the private sector. Instead, its role would be
to facilitate businesses and create conditions for investment rather than directly
operate commercial enterprises.
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Shahzad also rejected descriptions of the proposed aircraft
financing as a “public loan,” “hidden subsidy” or “state backstop,” saying such
claims should not be presented as established facts in the absence of an announced
government financing arrangement.
He stressed that the official statement referred to potential
financing support from US EXIM and did not announce government borrowing for
PIA or a sovereign guarantee.
“Privatisation transfers ownership and commercial management,”
Shahzad said, adding that this did not prevent the government from facilitating
commercial opportunities for Pakistani companies.
Source:
Hum English