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Ahead of election, Pakistan seals plan to sell national airline
Ahead of elections next week, Pakistan’s caretaker administration is making binding plans for a new government to sell loss-making Pakistan International Airlines (PIAa.PSX), opens new tab, according to the minister in charge of the process and other officials.
In the past, elected governments have shied away from undertaking unpopular reforms, including the sale of the flag carrier. But Pakistan, in deep economic crisis, agreed in June to overhaul loss-making state-owned enterprises under a deal with the International Monetary Fund (IMF) for a $3 billion bailout, Reuters reported.
The government decided to privatise PIA just weeks after signing the IMF agreement.
The caretaker administration, which took office in August to oversee the Feb. 8 election, was empowered by the outgoing parliament to take any steps needed to meet the budgetary targets agreed with the IMF.
“Our job is 98% done,” Privatisation Minister Fawad Hasan Fawad told Reuters when asked about the plan to sell the airline. “The remaining 2% is just to bring it on an excel sheet after the cabinet approves it.”
Fawad said the plan, drawn up by transaction adviser Ernst & Young, will be presented to the cabinet for approval before the tenure of the administration ends following the election. The cabinet will also decide whether to sell the stake by tender or through a government-to-government deal, Fawad said.
“What we have done in just four months is what past governments have been trying to do for over a decade,” Fawad said. “There is no looking back.”
Details of the privatisation process have not been previously reported.
PIA had liabilities of 785 billion Pakistani rupees ($2.81 billion) and accumulated losses of 713 billion rupees as of June last year. Its CEO has said losses in 2023 were likely to be 112 billion rupees.
Progress on the privatisation will be a key issue if the incoming government goes back to the IMF once the current bailout programme expires in March. Caretaker Finance Minister Shamshad Akhtar told reporters last year that Pakistan would have to remain in IMF programmes after the expiry.
Two sources close to the process told Reuters that a 51% stake with full management control would be offered to buyers after parking the airline’s debts in a separate entity, under the 1,100 page report from Ernst & Young.
Reuters could not independently confirm the contents of the report. Fawad did not give specific details of the size of the stake to be sold, but confirmed the plan involved the carrier’s debts being spun off into a separate entity.
Ernst & Young did not respond to requests for comment.
PIA spokesman Abdullah Hafeez Khan said the airline was assisting the privatisation process, extending “full cooperation” to the transaction adviser.
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Modi’s education minister resigns in major win for Indian youth protesters
The minister announced his resignation on X just as police fired tear gas to scatter young protesters in New Delhi, hours before their leaders were set to hold another round of talks with ministers.
India’s education minister resigned on Saturday, handing a major victory to youth protesters who had demanded he quit to take responsibility for examination paper leaks, and who erupted in celebration on news of his departure.
“We have done it,” said Abhijeet Dipke, founder of the Cockroach Janta Party that led the protests, to loud cheers at the Jantar Mantar protest site in New Delhi, Reuters reported.
“Considering the situation that has arisen at Jantar Mantar and across the country, so that anti-national forces do not take advantage of this situation … I have sent my resignation letter to the Prime Minister,” Education Minister Dharmendra Pradhan wrote in his post.
“I deeply respect the aspirations, feelings, and legitimate expectations of the country’s youth.”
The minister announced his resignation on X just as police fired tear gas to scatter young protesters in New Delhi, hours before their leaders were set to hold another round of talks with ministers.
Pradhan, 57, is a senior leader of Modi’s Bharatiya Janata Party and has been regarded as a rising figure, and even mentioned in the past as a potential BJP leader.
A minister since Modi first took office in 2014, he has held the petroleum and natural gas, steel, skill development and education portfolios, becoming education minister in 2021. His father was a veteran BJP leader and served as a junior federal minister between 1998 and 2004.
Pradhan’s resignation is “a victory of peace, patience & perseverance,” activist Sonam Wangchuk, who was on a hunger strike for 26 days to support the youngster’s movement, wrote on X.
CELEBRATIONS AT PROTEST SITE
Youngsters at the Jantar Mantar site shouted “Jai Hind”, a patriotic slogan meaning “Victory to India”, as the national anthem played on loud speakers and sweets were distributed among the crowd. At least 1,000 police officials stood nearby guarding the area, according to Reuters journalists at the site.
The leak of the high-profile medical college entrance test paper in May, which led to the cancellation of results and the government ordering a retest, affected 2 million young people.
Supporters of India’s youth-led “cockroach” movement had been protesting since June, but anger boiled over since police on Monday injured dozens of students, launching baton charges and firing tear gas to deter crowds of protesters marching on parliament.
The protests also reflect anger over job scarcity, corruption and government accountability.
“Young generation is here. This is win for the constitution,” protester Tluanga Ralte said, walking with a copy of the Indian constitution at the protest site after the minister’s resignation. “We are not a lazy generation.”
Federal authorities even on Saturday restricted access to the internet and to 18 metro stations to try to limit the protest in the capital, the latest day of such restrictions.
Pradhan is only the second minister to resign following a scandal since Modi came to power in 2014. M.J. Akbar resigned as junior foreign minister in October 2018 to fight allegations of sexual harassment made by more than a dozen women during India’s #MeToo movement.
Students, youth activists and opposition supporters had in recent days staged protests in the states of West Bengal, Telangana, Karnataka and Tamil Nadu, holding placards demanding Pradhan’s resignation and boycotting classes in some places.
Regional
Houthis say they attacked two Saudi tankers; Saudi Arabia says one ablaze in Red Sea
Yemen’s Houthi militia attacked two Saudi Arabian oil tankers in a military operation, the group said on Thursday, and a Saudi news agency later confirmed one of the two vessels was ablaze after an assault while sailing in the Red Sea.
The Saudi Arabian state news agency SPA, citing an official source at the General Transport Authority, said an attack caused a fire on the bow of the tanker Encelia but all crew members were safe. SPA did not say who had targeted the vessel.Authorities have secured the vessel and its crew and taken measures to protect the marine environment, describing the attack as a violation of international law, SPA reported, citing the source, Reuters reported.
In their statement, the Houthis said they attacked two tankers, the Encelia and Layla, saying the vessels had violated a naval blockade imposed by the Iran-aligned group on Saudi Arabia in the Red Sea. The Houthis said they targeted the tankers with a number of ballistic and cruise missiles as well as drones.
A maritime security source said earlier on Thursday that the Encelia had transmitted a distress call via VHF radio, reporting it had been struck by a missile while operating at the outer port limits of Saudi Arabia’s Jizan, in the Red Sea, and was on fire.
The British maritime risk-management group Vanguard also said the Saudi-flagged tanker Encelia was struck by an unknown projectile on its starboard side about 70 nautical miles (130 km) southwest of Saudi Arabia’s Al Shuqaiq at 2000 GMT.
The United Kingdom Maritime Trade Operations agency (UKMTO) also said it had received a report of an incident in the same area, saying the master of a tanker reported being struck by an unknown projectile that caused a fire onboard, which the crew were fighting. UKMTO said no casualties or environmental impact had been reported.
It was not immediately clear whether the UKMTO report referred to the Encelia, though the location and details matched the Vanguard report.
Vanguard said the Houthis had reportedly claimed the attack, as well as saying they had hit a second vessel, the Layla, which it said remained unconfirmed.
In the same statement announcing their attack on the two tankers, the Houthis also said they had forced around 10 ships to retreat and return. Reuters could not immediately verify this account.
Five tankers changed course in the Red Sea on Wednesday, with two signalling the Suez Canal as their new destination after the Houthis warned ships to avoid Saudi ports, ship-tracking data showed.
Regional
US says it reaches nuclear power deal with Saudi Arabia
A civil nuclear deal with Saudi Arabia has been in the works for years during both President Donald Trump’s first administration and that of former President Joe Biden.
The U.S. and Saudi Arabia have reached a landmark agreement on civil nuclear power, the U.S. Energy Department said on Wednesday, a deal that allows the kingdom to build nuclear reactors using American technology and to enrich uranium, Reuters reported.
A civil nuclear deal with Saudi Arabia has been in the works for years during both President Donald Trump’s first administration and that of former President Joe Biden.
No deal has come together before now, however, in part because of warnings from nonproliferation groups who say that it could offer Saudi Arabia a path to develop a nuclear weapon.
Unlike the Biden plan, the current deal does not include a so-called Additional Protocol that allows the U.N.’s International Atomic Energy Agency to carry out intrusive snap inspections.
The deal would also allow Saudi Arabia to enrich uranium and reprocess nuclear waste, both of which are potential pathways to making a nuclear weapon. The UAE agreed to forgo both of those when it signed a similar deal with the U.S. in 2009.
U.S. Secretary of Energy Chris Wright and his counterpart Prince Abdulaziz bin Salman signed the pact, known as a 123 Agreement, alongside a bilateral safeguards agreement, the U.S. Energy Department said in a release.
The administration said the deal also abides by nonproliferation agreements in the U.S. Atomic Energy Act, which are among the world’s strongest. Saudi Arabia has long said if it does not partner with the U.S., it could partner with China or Russia which have different proliferation standards.
The energy department said the deal now goes to Congress. Unless Congress raises votes to object to the deal within 90 session days, the deal will go into force. But it would need to have a two-thirds majority to override a presidential veto.
Some nuclear experts called on lawmakers to vote down the deal.
“We urge all members of Congress on both sides of the aisle to recognize the risks and to exercise their power to reject or modify Trump’s proposed nuclear deal with Saudi Arabia so as not to open the door for nuclear proliferation in the Middle East even wider,” said Kelsey Davenport, director for nonproliferation policy at the Arms Control Association.
The about 30-year deal for the construction of AP1000 reactors, which is worth tens of billions of dollars, would benefit Westinghouse, jointly owned by Canada-based Cameco (CCO.TO), and Brookfield Asset Management (BAM.N).
An industry source said the deal requires a feasibility study on using U.S. technology in Saudi Arabia. The study and the slow pace of building nuclear power plants and uranium enrichment means it could take many years to build the infrastructure.
Saudi Crown Prince Mohammed bin Salman has repeatedly said he does not want the kingdom to build a nuclear weapon but it would if Iran did, raising concerns about potential proliferation. Several Democratic lawmakers have warned that the deal could start an arms race in the Middle East as the U.S.-Israeli war on Iran grinds on, read the report.
“They are allowing Saudi Arabia, a belligerent and authoritarian nation, to develop nuclear weapons technologies while starting a war with Iran under the guise of preventing an Iranian nuclear bomb,” said Senator Edward Markey, a Democrat. “This deal would make us all less safe.”
Senator Jim Risch, a Republican, said he agrees with the kingdom’s crown prince that the deal stands to benefit both countries.
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