KARACHI: Pakistan International Airlines (PIA) on Thursday decided to commence disbursement of Rs9.6 billion to employees who opted for voluntary separation scheme (VSS) from next week after two employees allegedly expired due to shortage of funds on non-payment of VSS dues.
PIA’s spokesperson said a meeting decided to commence the payment to VSS approved applicants from next week in collaboration of PIA, ministry of aviation and Accountant General of Pakistan.
Minister for Aviation Ghulam Sarwar presided over a meeting that was attended by PIA CEO Arshad Malik and Secretary Aviation.
The PIA’s spokesperson said the VSS payments were subject to audit of Accountant General of Pakistan (AGP) and PIA management showed resentment on this.
Employees of PIA earlier appealed to the Supreme Court to take action against delay in clearance of VSS funds as the PIA couldn’t meet its commitment to clear dues by January 31. They said the two VSS applicants died because of financial constraints and uncertainty related to payments of retirement funds. PIA discontinued the medical facilities of all employees who opted for VSS from December 31.
It was decided that PIA would operate a special bank account with the National Bank of Pakistan .This account will be controlled by the zonal office of AGP. The funds have been transferred to the said account, according to the spokesperson.
The spokesperson said nearly 2,000 employees availed the VSS that was introduced after the approval of the government last year to restructure the loss-making airline.
Furthermore, subsequent to the approval of cabinet, the finance ministry had transferred Rs9.6 billion to the ministry of aviation. In December last, PIA announced VSS with a two-week deadline to employees for a decision as lose-making state-run airline continued to be a drain on public funds for over a decade.
There were 10,500 regular employees on the payroll. If contractual workers and daily wagers are included the total workforce was somewhere around 13,000.
The airline sees attrition of 1,000 employees every year. The airline incurred over Rs56 billion losses alone in 2019 and that was continuation of its subpar performance for over a decade.
The VSS package has been made for employees in two categories: over 18 years of service and below 18 years of service. The package compensation includes accumulated leaves, gratuity, provident fund, lump sum medical and pension up to the age of 65 years. The previous government decided to privatise PIA and set April 2018 as the last date of its privatisation as its losses swelled to more than Rs400 billion since 2008. Under the law, the management control of the PIA continues to remain in the hands of the federal government and majority shares could not be transferred to any private party.
PIA also planned to set up base maintenance in Islamabad. Line maintenance is already carried in the capital city, saving its costs of the aircraft shift to Karachi after every four flights. Since engineering is capital-intensive, its complete relocation depends on when and how Rs6 to 7 billion are raised, according to the spokesman.