The Public Accounts Committee (PAC) has raised alarm over the absence of a workable repayment plan for PIACL’s Rs 650 billion debt, with members characterising the liabilities as a financial “black hole” during a recent review meeting.

The session, chaired by Syed Naveed Qamar, examined audit findings related to the Ministry of Defence (Aviation Division) for the fiscal year 2023-24. During the briefing, Lieutenant General Muhammad Ali (retired) updated committee members on audit observations contained in the reports.

Officials informed the committee that a significant portion of the liabilities cited in various audit reports had since been shifted to PIA Holding Company Limited. However, uncertainty persists over how these obligations will ultimately be settled.

AVM Muhammad Amir Hayat, Chief Executive Officer of PIA, told the committee that the Finance Division has yet to finalise a decision regarding the liabilities parked under the holding company structure. The committee chair described the unresolved debts as a “black hole,” underscoring the lack of clarity in the financial framework.

Audit officials referenced provisions of the Federal Excise Duty Act, 2005, noting that excise duty and advance tax collected from passengers must be deposited into the national exchequer within 45 days of deduction. The audit of PIA’s finance department for 2022 found that the airline failed to meet these statutory timelines, causing a build-up of unpaid obligations and further straining liquidity.

A representative of the Defence Ministry informed the committee that of Rs 131.5 billion in total payables, Rs 115 billion has already been transferred to the holding company under the approved Scheme of Arrangement, while Rs 9 billion remains tied up in legal disputes. The committee instructed PIA to pursue recovery of a Rs 5 billion liability.

Members were also briefed on two contested PIA properties, including a football ground in KDA Scheme-I, Karsaz Karachi and the Sambara Inn Hotel in Larkana, which have now been transferred to PIA Holding Company amid ongoing jurisdictional issues between the federal and Sindh governments.