The Pakistani government of Tehreek-e-Insaf on Monday approved, in principle, a plan that seeks to lay off more than 3,800 permanent and contract employees of Pakistan International Airlines (PIA) – one in every three – to cut annual losses of Rs4. 2 billion.
The Cabinet’s Economic Coordination Committee (ECC), which approved the Voluntary Separation Scheme (VSS) for PIA employees, also sanctioned more than Rs38 billion in additional budget for the military to fence the Pakistan-Afghanistan border and provide allowances to armed personnel.
The ECC approved Rs12.87 billion as VSS fees to be paid within two and a half years.
The PTI government has approved a plan to lay off 9,350 Pakistan Steel Mill employees.
“After going through discussions, it was decided to agree, in principle, to a voluntary separation from the service scheme for PIA,” the Ministry of Finance said after the ECC meeting.
The decision to offer VSS to around 3,861 permanent and contract employees and limit PIA’s own workforce to around 7,500 employees to manage 30 aircraft also indicated that Prime Minister Imran Khan had no plans to expand PIA’s operations.
Apart from 3,861 positions that were declared surplus, there were another 644 positions, which were filled through outsourcing but not required in the new operating plan.
In terms of performance, the Aviation Division has actually shown a staff surplus of 4,505, which is 31% of the current total workforce of 14,576 employees. There are 11,356 permanent and contract employees and 3,220 other outsourced positions. Of the 11,356 permanent and contract employees, PIA management has declared 3,861 a surplus, which is 34% of the regular and contract workforce.
The number of outsourced workers was 3,220 and 644 positions were declared surplus.
“PIA management has planned to achieve a ratio of 1: 250 (250 per aircraft employee) for 30 aircraft, a total of 7000 to 7,500 employees considered an appropriate measure for PIA,” according to the ECC summary.
The layoff of 3,500 employees will result in annual savings of Rs4.2 billion and the government will recover VSS costs of Rs12.9 billion in two and a half years, said the Aviation Division.
PIA management has proposed that in the engineering department 1,173 people or 31% of the total workforce are surplus. In the commercial department, a total of 540 employees and outsourcing positions were declared surplus, i.e. 30% of the workforce.
In the aviation operations department, 244 employees; ACP 709; service flight 603; food service 189 and in the finance department 171 employees had declared a surplus.
According to the Aviation Division summary, the liquidity requirements for PIA’s voluntary split plan were approved in principle by Prime Minister Imran Khan in April last year.
The Aviation Division presented the VSS plan to the ECC in July last year, which the cabinet body had postponed until the completion of last year’s Haj operations.
The ECC also approved four separate Technical Additional Grants for the Ministry of Defense and the Ministry of Home Affairs for various projects during the current FY 2020-21, according to the finance ministry. The ministry did not disclose details of this additional grant.
The ECC approved an additional budget of Rs26.9 billion for the military to fence the Pak-Afghanistan border. It also sanctioned Rs6.2 billion for paying salaries to the (Northern) Special Security Division.
The division was formed to provide protection to the China-Pakistan Economic Corridor (CPEC). Another Rs5 billion has been approved in internal security duty support for the military.
Last year, Financial Advisor Dr Abdul Hafeez Shaikh has directed that all of these grants should be made part of the regular defense budget.
The finance ministry stated that in the summary presented by the Ministry of Information and Technology regarding SIM / Smart-card manufacturing in Pakistan, the ECC formed a committee to examine proposals and present a report for the way forward in two weeks. .
In addition, the ECC recommends the formation of a committee consisting of representatives from the Ministry of Trade and the Ministry of Research and National Food Security to determine the deadline for exports of mangoes and kinnows.
The ECC approved the Petroleum Division’s proposal, in principle regarding the allocation of gas from Bashar X-IST to third parties of up to one million MCFD. The ECC approved a budget allocation in support of the NITB for the provision of ICT services in the Prime Minister’s Office for the Prime Minister’s Kamyab Jawan Program for FY2020-21 of Rs53 million.