The federal government has announced plans to invite fresh bids for the privatization of Pakistan International Airlines (PIA) after concerns were raised about the significantly lower offers received in the initial bidding process. This decision was shared during a meeting of the Senate Standing Committee on Privatisation, chaired by Senator Talal Chaudhry, where the reasons for the lack of investor interest and subpar bids were thoroughly discussed.
Federal Minister for Privatisation Abdul Aleem Khan emphasized that Prime Minister Shahbaz Sharif is giving significant attention to the re-privatization of PIA, believing that the airline has the potential to become profitable with bold decisions to facilitate privatization.
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The committee was briefed about PIA’s dire financial situation, with cumulative losses amounting to Rs830 billion. Of this, Rs623 billion has been transferred to a holding company, leaving PIA with Rs200 billion in liabilities. Khan stressed that despite these challenges, privatization is crucial to reviving the airline.
He drew comparisons to Air India’s privatization, which had faced multiple failed attempts before eventually succeeding, suggesting that PIA could similarly be revived through strategic reforms and support to attract credible investors.
The Secretary of the Privatisation Commission added that much of the groundwork from the initial privatization attempt had already been completed, meaning the re-bidding process could be expedited. However, the committee acknowledged that previous obstacles—such as investor demands for tax waivers and the Federal Board of Revenue’s (FBR) failure to remove GST on new aircraft procurement—had hindered progress. Khan criticized the imposition of such taxes, arguing that they undermine PIA’s competitiveness in the global aviation market.
Despite its financial difficulties, Khan pointed out that PIA holds valuable assets, including profitable routes, which could make it an attractive investment opportunity if the privatization process is properly executed.
