Govt won't buy aircraft for privatised PIA or provide sovere

Govt will not buy aircraft for privatised PIA or provide a sovereign guarantee or taxpayer-funded loan, adviser Khurram Schehzad says. Finance Minister Aurangzeb sought US EXIM financing for PIA aircraft and engines, including Boeing 787 Dreamliners and pre-delivery payments Government to facilitate access to US financing without assuming PIA's commercial risks, Khurram Schehzad says Finance Minister Aurangzeb seeks US EXIM support for PIA aircraft, engines and possible pre-delivery payments Adviser says potential asset-backed financing does not automatically require a sovereign guarantee or taxpayer-funded loan KARACHI: The government will neither purchase aircraft for privatised Pakistan International Airlines (PIA) nor provide a sovereign guarantee or taxpayer-funded loan for their acquisition, an adviser to the finance minister said on Sunday, clarifying Islamabad's role in facilitating potential US financing for the airline. Finance Minister Muhammad Aurangzeb met US Export-Import Bank Chair John Jovanovich in New York on Sept. 24 and sought financing support for PIA aircraft and engines. The discussions also covered potential financing for refinery upgrades and the Reko Diq copper and gold mining project in southwestern Balochistan. Adviser to the Finance Minister Khurram Schehzad said the government's role was to help businesses access international financing and suppliers rather than assume their commercial risks. 'The Government is neither buying aircraft for a privatised PIA nor has it announced any sovereign guarantee or taxpayer-funded loan for doing so,' Schehzad said in a post on X. His clarification came amid public discussion over the government's role in facilitating potential financing for PIA following its privatisation and whether such support could expose taxpayers to the airline's commercial risks. PIA has expressed interest in Boeing aircraft, particularly 787 Dreamliners, while Aurangzeb sought US EXIM support for a financing package during last week's meeting. The two sides also discussed possible financing for aircraft pre-delivery payments. Schehzad said US EXIM, like other export credit agencies, supports exports from its home country and can therefore provide financing support to foreign buyers of US-made Boeing aircraft. He said the agency's framework allows for asset-backed aircraft financing, under which financing can be secured against the aircraft itself, with credit assessed on the airline or lessee and any guarantor involved. 'A sovereign guarantee is therefore not an automatic requirement,' he added. Pakistan has been pursuing a broader shift towards private-sector-led growth, including the privatisation of loss-making state-owned enterprises, as it seeks to reduce the government's role in commercial activity and attract private investment. 'Private-sector-led growth does not mean Government abandons the private sector; it means Government enables it rather than running businesses itself,' Schehzad said. He rejected suggestions that the US EXIM discussions amounted to a public loan, hidden subsidy or state backstop for PIA, saying no such arrangement had been announced. 'The official statement refers to potential US EXIM financing support; it does not announce Government borrowing for PIA or a sovereign guarantee,' Schehzad said. 'Privatisation transfers ownership and commercial management,' he added. 'It does not require the Government of Pakistan to stop opening doors for Pakistani companies.'