ISLAMABAD: The government is preparing for the final auction of Pakistan International Airlines (PIA) in the first week of October, according to an official statement on Saturday.
The official confirmed that all issues related to the airline’s privatization, including outstanding commercial loans, would be addressed within the next few weeks.
In June, the government announced that six companies had been shortlisted to bid for PIA from an initial pool of eight, following expressions of interest. The sale of more than 51 percent of the loss-making airline is part of the economic reforms required by the International Monetary Fund (IMF) for a new $7 billion loan program.
Earlier this week, the central bank denied a waiver or exemption for prospective buyers concerning PIA’s commercial bank loans of Rs268 billion ($971.1 million) and other financial guarantees. This development was seen as a setback to the privatization process.
Dr. Ahsan Ishaq, a spokesperson for the privatization ministry, stated, “It has been mutually decided with the pre-qualified bidders to hold the final auction for PIA in the first week of October. We are in discussions with the central bank to resolve the issue of outstanding commercial loans before the final bid.”
The pre-qualified bidders for PIA include Air Blue, Arif Habib Corporation, Blue World City, Fly Jinnah, Pak Ethanol (Pvt) Consortium, and YB Holdings Consortium. The government had initially aimed to finalize the deal on August 14, Pakistan’s Independence Day, but the timeline was extended due to requests from bidders for updated audited accounts, aircraft lease agreements, and clarity on the ban on flights to Europe.
According to official data, Pakistan has 88 commercially operated state-owned enterprises, with combined losses reaching Rs730.258 billion ($2.61 billion) in the fiscal year 2022 (FY22). The government’s five-year privatization plan, ending in 2029, includes 24 state-owned enterprises for sale, including PIA.
Dr. Ishaq mentioned that PIA’s cumulative losses have exceeded Rs800 billion ($2.86 billion), with the airline’s total asset valuation at around Rs160 billion ($572 million). Despite the ongoing challenges, he emphasized that the government is committed to privatizing state-owned enterprises to address substantial annual losses.
“The privatization process is complex and time-consuming, but we are dedicated to moving forward with it diligently,” Dr. Ishaq added.
