The government approved a bailout package worth Rs15.6 billion for the struggling Pakistan International Airlines (PIA) and authorized an Rs7.5 billion interest-free loan scheme for purchasing eco-friendly motorcycles.
The Economic Coordination Committee (ECC) made decisions totaling Rs22 billion, including indirect impacts on the budget in the form of sovereign guarantees and commercial bank loans for acquiring electric two-wheeler and three-wheeler motorcycles.
Finance Minister Ishaq Dar chaired the ECC meeting, refraining from penalizing sugar millers who failed to maintain local sugar prices in exchange for permission to export 250,000 metric tons of sugar.
According to the finance ministry’s statement, the ECC approved raising the sovereign guarantee limit for PIA to Rs263.2 billion. In addition, it mentioned that the government’s guarantees related to US dollar-denominated loans taken by PIACL were approved to increase by Rs15.6 billion. As a result, the current borrowing limit supported by sovereign guarantees has risen from Rs 247.6 billion to Rs 263.2 billion.
PIA had requested an Rs45 billion bailout package from the government to cover its interest expenses and fund its operations.
According to sources, the airline also sought an Rs22 billion federal injection to pay off the interest on its loans, Rs15.6 billion in additional sovereign guarantees to obtain more loans, and another Rs7 billion to purchase an aircraft.
On Thursday, the ECC only addressed the issue of sovereign guarantees. The ECC approved the Rs15.6 billion additional guarantees on the same day that parliament rejected a bill seeking an Rs21 billion budget to hold elections in Punjab and Khyber-Pakhtunkhwa (K-P).
