No govt financing, sovereign-guaranteed loans for new PIA aircraft: PM's finance adviser

Finance Adviser to the Prime Minister, Khurram Schehzad, clarified on Sunday that the government has no plans to finance new aircraft for the privatised Pakistan International Airlines (PIA). He tweeted that the government is not purchasing aircraft for the state-owned airline nor has it announced any sovereign guarantee of taxpayer-funded loans for such acquisitions.

These claims emerged following a meeting between Finance Minister Muhammad Aurangzeb and the Chair of the US Export-Import (Exim) Bank, John Jovanovich, during the 81st session of the United Nations General Assembly in New York. The finance ministry mentioned that they discussed the Reko Diq mining project and funding opportunities for purchasing an aircraft for PIA.

Schehzad pointed out that the US Exim Bank's mandate is to support its country's exports and jobs, similar to other export credit agencies. A sovereign guarantee is not an automatic requirement for asset-backed aircraft financing, he added. The finance minister's engagement with US Exim was not limited to PIA; it encompassed potential financing for aviation upgrades, refinery projects, and Reko Diq as part of broader Pakistan-US economic engagement.

Schehzad emphasized that the government is deliberately reducing its role in commercial activities, promoting privatisation, and creating space for private capital. He clarified that claims of a 'public loan, hidden subsidy, state backstop' or taxpayers assuming PIA's commercial risks are not accurate, as no such arrangement has been announced.

The official statement refers to potential US Exim financing support, not government borrowing for PIA or a sovereign guarantee.