Pakistan's upper house of parliament has rejected a bill to sell the cash-strapped national carrier, Pakistan International Airlines.
Loss-making state enterprises drain about USD$5 billion from the state every year, around an eighth of the government's fiscal revenues of about INR4 trillion rupees (USD$38.2 billion) last year.
The bill now goes to a joint session of parliament next week, where it is expected to pass, because Prime Minister Nawaz Sharifâ€™s ruling party holds a majority in the combined assembly.
"Government advisers have failed to present a revival plan for Pakistan International Airlines (PIA), instead their complete focus is on privatisation," opposition Senator Saleem Mandviwalla said in a statement.
The sale of 68 state-owned companies, among them loss-making enterprises such as PIA, is a crucial part of the 2013 IMF bailout and was meant to put the country's finances back on track.
The PIA sell-off required amending a 1956 law that barred private ownership of the national airline. Instead of an amendment, the government on December 5 issued a presidential decree to turn the national flag carrier into a limited company.
The move prompted bitter criticism from political opponents who accused the government of bypassing parliament by opting for a decree over an amendment that would require parliament to vote.
The ruling party then moved the PIA Corporation Conversion Bill 2015 in the lower house of parliament in January, where it passed.
On Friday, however, the Senate rejected the bill, with votes from the opposition Pakistan People's Party, which has a majority in the upper house.
The PPP opposes the privatisation of PIA, saying it can be restructured and revived, rather than sold off.