Pakistan Aviation: Get real stake holders on board


19 May shall be remembered as the darkest day in the aviation history of Pakistan when Minister of Information and Broadcasting broke the news to media that first point on the agenda was how to outsource the airports of Pakistan. This is considered a prerequisite to bring airports to international standards. A strange philosophy invented by aviation division to bring airports to international standards. Before embarking on such adventures the minister should have at least mentioned what are the parameters of bringing airports to international standards and what are their plans? Question arises are we not capable and competent enough in meeting those international standards? What a tragedy of this nation we can make a nuclear bomb, build motorways of international standards but cannot put right our airports and bring it to international standards?
Prime Minister had constituted a committee that will fast track the process under federal minister for aviation, besides special assistant to prime minister on overseas Pakistanis Zulfiqar Bukhari; we have chairman BOI, Babar Awan and Abdul Razak Doud Advisor on parliamentary affairs and commerce respectively. If you look at the members of committee it has been formed without involving the main stake holder the CAA. How strange it looks, people who are manning airports since its inception as per ICAO’s mandatory requirements could be left out. A question that emerges how the committee members all of them having no experience of aviation and airport managements except travelling through these airports can be entrusted this job to make these airports as models that could be compared with international standards.
At present aviation division is in total mess. Specially CAA whose performance as a regulator is now under question. It is without Director General since 2018 and Secretary Aviation is holding additional charge of DG CAA that is otherwise in conflict with the interest. In the absence of DG CAA the charge is always temporarily held by Deputy Director General seconded to CAA a serving Air Vice Martial. It would have been more appropriate to concentrate in posting some senior competent officer of CAA as DG but as always we have wrong approaches to straight problems. We have some good officers recently retired whose services could be utilised. I would like to suggest two names of most competent ,honest dedicated Syed Yousaf Abbas and Khawar Ghayas (both retired as Dy DG) and PM may see their CV’s and call them for interview and take decision or as deemed appropriate. Here I would like to quote statement of former Indian Prime Minister Manmohan Singh who has said that India would never privatise or outsource any government asset that has direct bearing on defence, surprisingly this aspect has also been overlooked
There is no objection in out sourcing. But before doing that we should be clear about the basic concept of outsourcing. This basically means asking a third body vendor to work for you on contractual basis for a fixed term on some terms and conditions with hefty salaries and perks. There are two main reasons that organisations decide to outsource are to reduce the cost and incompetence to run the organisation. The main industries that are outsourced are consumer and industrial products, financial services, healthcare, media, telecomm sector, procurement and downsizing of manpower. Do our major airports running in losses, the answer is emphatic No. CAA is perhaps the only organisation that is generating huge revenue of over Rs 60 billion per annum, if CAA was poor performer how could they generate this huge profit? Pakistan suffered a great deal in privatising our costly assets in the past of those units which were generating huge revenue like HBL,UBL, OGDCL and PTCL, but those units which were loss making are still with us because the buyer has no interest. But here we are outsourcing airports which are being manned by experienced fully trained staff. What government is contemplating that by handing over to private party they will be able to cut down the employees? This could be a dream under the present circumstances. This exercise was carried out in the past also but it was resisted by employees so this proposal was shelved. CAA has already carried out an exercise to reduce manpower by naming it “Rationalisation of Manpower”. The purpose was to identify surplus staff in various branches for downsizing under the cover of rightsizing. CAA’s bifurcation into regulatory and service provider was good step; in fact this was overdue being ICAO requirement. During PML N tenure stage was all set to outsource but it did not materialise. The idea was to outsource major airports to influential persons having connection with the government. By outsourcing the idea was to give benefit to own people and secondly to get rid of CAA employees under the cover of poor performance through the vendors. But the aviation division failed to appreciate that how an organisation with label of poor performance could earn huge profit. The only yardstick is the extent of profit the organisation makes. It would be a big blunder to outsource airports that are generating huge profit. No organisation can work without supporting staff and the axe always falls on them. A director would need a PA, peon, cleaner, clerks, superintendent and a deputy etc. We have seen how our gold mine PTCL was handed over to Etisalat with 26% shares in pea nuts and allowing them to pay bid money within 5years. That simply meant pay as you earn, and they still owe us $800 million, with interest must be now in billions. They reduced the manpower from 65000 to 24000 in the name of restructuring but at what cost. Before privatisation it was feeding so many families and earning huge profit. These private owners keep introducing new packages and keep readjusting the charges without any rationale and earn huge profit convert it in to dollars and take out in their own country. There is no restriction by government on taking their profit out of country
As per privatisation policy 90 percent amount was for debt retirement rest for improving infrastructure, practically neither the debt was retired nor infrastructure developed in the bargain we lost the asset and the money. This is also appropriate time to review privatization policy. Whatever assets have been privatized to foreigners have we succeeded in our objectives? Practically it has been seen that privatization has failed and could not look after the interest of people and ended up in losing our costly assets and money
PM in principle has approved the plan in which Airport Services will be led by Chairman assisted by CEO and three COO for the three major airports Karachi-Islamabad and Lahore. Lahore Airport is a joint user for the PAF and the CAA will have to coordinate with the vendor. Imagine during crucial times private owner not cooperating?
There will be additional hiring’s salary and perks running in to millions without any usefulness. For the readers the revenue generated through aeronautical charges during July 2019 to Dec 2019 (6 months) at Karachi Lahore and Islamabad has been Rs 7.5 Billion, Rs 7.83 Billion, and Islamabad Rs 9.25 Billion respectively. With that earning what is the justification of out sourcing these airports. In case this fateful decision is taken these should be outsourced at least 10% higher than the present earning with no liabilities to CAA.
Lastly Prime Minister should have just asked one question from Aviation Secretary that the entire aviation industry is stand still since March 2020 due to corona virus and as per aviation experts minimum two years are needed to revive the industry. Is there any point in outsourcing these airports when there is no traffic, this if done would go in pea nuts because at present there is no movement of aircrafts and airlines have been closed and staff has been laid off revenue is continuously nose diving what is the wisdom behind this proposal? Logically it can be concluded that the proposal is arbitrarily to favour someone but not in national interest. It may be pertinent to mention here that in case of outsourcing these three airports the PIA shall be bound to pay all type of charges previously paid to CAA to private vendor who will not defer payments. Presently PIA roughly owes over Rs 90 billion to CAA that keeps accumulating each month. Somehow or the other we have failed miserably in determining our priorities and taking right decisions at the right time. Our condition at national level is like a mechanic who has opened the engine with different parts spread all around but now does not know how to reassemble it.