Islamabad Web Desk:
The government has once again decided to invite bids for the privatization of Pakistan International Airlines (PIA), signaling a renewed push towards this initiative after prior efforts faced challenges.
According to sources in the Privatization Commission, work on the privatization process has resumed swiftly following government approval, and discussions with investors are ongoing. This decision was disclosed during a meeting of the National Assembly’s Standing Committee on Privatization.
Committee member Khawaja Shiraz Mehmood questioned why only one bidder remained during the privatization process and whether the government was truly committed to the endeavor or merely creating a facade of progress. He criticized the process for inviting ridicule, citing that even the privatization of other entities like HBFC (House Building Finance Company) has seen limited participation.
Challenges in the Process
The Secretary of the Privatization Commission explained that stringent conditions were a key hurdle during the HBFC privatization. While two bidders had initially remained, one was eventually disqualified for failing to meet the State Bank’s requirements.
Addressing the expenses incurred in the privatization of PIA, member of the National Assembly Sehar Kamran demanded clarity on accountability and the commission’s responsibilities in this regard.
Khawaja Shiraz Mehmood further noted flaws in the privatization process that hindered progress. Committee Chairman Farooq Sattar echoed the concerns, stating that the time taken in finalizing decisions was discouraging bidders, leading to delays and increased costs.
Current Developments
The Secretary informed the committee that a bidding round for PIA was held on October 31 but faced hurdles as participating parties raised issues regarding the airline’s liabilities. Bidders proposed adjusting PIA’s outstanding debts of PKR 191 billion against its PKR 141 billion in assets. However, due to obligations under the IMF program, the government declined to offer such relief. Subsequent negotiations with the IMF have led to the removal of these conditions.
The Secretary also noted that the European Union’s ban on PIA flights has now been lifted, which may improve the airline’s prospects. The government has approved a fresh notice inviting expressions of interest, and efforts are accelerating to finalize the process.
Conclusion
As the government engages in renewed discussions with investors, it aims to address past shortcomings and ensure the privatization process proceeds smoothly this time. The coming weeks will reveal whether these efforts will succeed in turning the tide for the struggling national airline.