By Staff Reporter
ISLAMABAD: The government has received requests from pre-qualified bidders to delay the final offer for the state-owned Pakistan International Airlines (PIA), pushing back the planned completion of the process beyond the initially targeted date of August 14.
“We have received a request from the pre-qualified bidders to delay the process as they wanted to get hold of some additional information on the airline before making a final deal,” Dr. Ahsan Ishaq, spokesperson for the privatization ministry, said.
“The privatization of PIA will definitely take place, as a mutually agreed date for the process is being worked out with the bidders.”
The government had selected six companies, including Air Blue, Arif Habib Corporation, Blue World City, Fly Jinnah, Pak Ethanol (Pvt) Consortiums, and YB Holdings Consortiums, to bid for the national air carrier.
Pakistan plans to sell more than 51 percent stakes in the loss-making airline as part of economic reforms suggested by the International Monetary Fund (IMF) for a fresh $7 billion loan program.
The bidders are seeking PIA’s latest audited accounts, aircraft lease agreements, and clarity on flights to Europe, which are currently banned by the European Union Aviation Safety Agency (EASA) following a 2020 plane crash in Karachi that killed nearly 100 people.
The ban has resulted in an annual revenue loss of nearly Rs40 billion for PIA.
The government was initially planning to seal the deal on the country’s Independence Day, August 14, which was now expected to be delayed by some weeks.
“Some weeks of delay in the final bidding of the PIA on request of the bidders will not affect the overall privatization process,” Ishaq said.
Pakistan’s state-owned enterprises (SOEs) have accumulated significant losses, with PIA’s cumulative losses alone surpassing Rs800 billion. The total asset valuation of the airline stands at approximately Rs160 billion.
The government aims to sell 51 percent to 100 percent of the carrier, which has failed to report an annual profit for nearly two decades. PIA has been burdened by a high debt load, inefficiencies, and corruption allegations, resulting in an overall decline in its financial performance.
Islamabad plans to sell PIA and outsource three of its airports in an attempt to curtail losses and enhance foreign exchange reserves amid a balance of payment crisis. The country’s fragile $350 billion economy faces significant challenges, with the top ten loss-making entities.
Previous governments avoided disposing the flag carrier as a potentially highly unpopular move. However, the country’s recent macroeconomic crisis and its desperate need to secure another financial assistance package from the IMF has forced the government to go ahead with the auction.
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