Dar Diaries-II

We should at least find strategic partners for both Pakistan International Airlines and Pakistan Steel Mills.
“Will somebody bid for even 26 percent stake in either one of these entities?” the Finance Minister asked rhetorically. Without waiting for a response, he added that both companies have negative balance sheets.
The solution he has offered in the case of PIA, is seemingly, the same as suggested by Shaukat Tarin during his stint as Finance Minister: “let there be a new and an old PIA”.
So what would constitute the “new” and implicitly much improved national carrier? The go-to guy for the PML-N government stated that the airplanes (along with the associated depreciation) and flight routes would constitute the new entity.
While acknowledging that the valuation of flight routes is a technical subject, he said “the routes have value similar to goodwill. The next step, according to him, would be to seek out strategic partners among credible airlines of the world, for the new entity that are willing to invest and acquire a stake in it.
The difference between Tarin and Dar emerges beyond this point as the current Finance Minister informed he has received encouraging responses from international investors that may culminate into investment for the national carrier and other PSEs.
He highlighted a recent statement by Export-Import Bank of the United States that indicated intent to provide long-term loans of up to $1 billion to Pakistan. He also listed a number of other institutions that have resumed relations with the country after a lull brought on by economic and political instability in the country. Such financing arrangements can go a long way in helping PIA acquire and service assets such as aircrafts.
Moving on to the Pakistan Steel Mills, he reiterated his desire to seek a strategic partner. The minister highlighted that PSM has increased its capacity utilization to over 50 percent, adding that “it will hit breakeven when it reaches about 77 percent capacity utilization.”
Drawing similarities between the two white elephants, Ishaq Dar stated that “both institutions are heavily over man powered” but in the same breath added that “we will not make anyone redundant”.
“The real problem for PIA is that they have scarcity of flying stock. The troubles plaguing PSM are similar, according to Dar who is confident that “if we can improve capacity utilization, the entity can be turned around with the help of a strategic partner.”