‘PPP destroyed institutions’ including PIA - Shahbaz

The Statement

Chief Minister Shahbaz Sharif holds the Pakistan Peoples Party‘s government responsible for destroying national institutions. Addressing a public gathering on May 1, he said, “The PPP destroyed institutions including Pakistan International Airlines (PIA), Pakistan Railways, and Pakistan Steel Mills.” TruthTracker will investigate this statement by looking at PIA.

Background

The national airline has been suffering losses for many years. The PPP government repeatedly changed the administration during last five years but could not fix the problem. PIA Spokesperson Mashood Tajwar told Truth Tracker, “The top administration was changed four times during last five years.”

Shahbaz Sharif, a leader of the opposition Pakistan Muslim League-Nawaz, bluntly criticizes PPP and accuses it of having destroyed the national flag carrier.

The Check

Truth Tracker has looked into PIA’s annual reports from 2007 to 2012 to find facts.  Annual Report 2007 reveals that the organization suffered losses totalling Rs.37 billion that year. Annual Report 2012 shows a 300% increase in losses, which reached Rs. 151 billion by the end of 2012.

Tajwar says the main reasons for losses are an exorbitant rise in fuel prices and the heavy consumption of fuel by the old aircraft in PIA’s fleet. “The Rupee’s devaluation against US Dollar is also another reason [for the losses], as the Rupee has been devalued from Rs.60 to close to Rs.100 during last five years,” said the spokesperson.

He said the airline’s fleet is not fully operated as it has been reduced  from 40 to 32 aircraft and not a single new plane was added during last five years.

Details

Talking to Truth Tracker, Dr. Salman Shah, former finance minister and economist, said that under the PPP government, public corporations suffered a lot. “Appointments of unprofessional persons to top slots, poor management, a disparity between fuel prices and the business plan, and not buying fuel-efficient planes are main reasons for the huge losses,” he said.

He says PIA is an over-employed public corporation employing an average of 500 employees per plane. The international average is 100 employees per plane.

Shah said a well-thought-out business plan was introduced for next five years in 2007 to reduce losses and make PIA a profitable organisation, but the PPP government failed to implement the plan properly.

Ruling

After conducting an in-depth study of annual reports, talking with PIA officials and economists, Truth Tracker reached the conclusion that the airline’s losses increased by 114 billion during PPP’s five-year rule, making Shahbaz’s statement mostly true. We will similarly review what happened to other state institutions in subsequent articles.