ISLAMABAD: The authorities is “poised to restart the bidding course of for the privatisation of Pakistan International Airlines (PIA)” following a failed try to promote the loss-making state-owned entity because it acquired an underwhelming supply of Rs10 billion from a sole bidder.
Federal Minister for Privatisation Abdul Aleem Khan made these remarks through the assembly of the Senate Standing Committee on Privatisation, chaired by Senator Talal Chaudhry, on Monday the place he briefed members on the PIA privatisation efforts.
He instructed the assembly that the federal government was planning to ask recent expressions of curiosity (EOIs) after earlier makes an attempt confronted hurdles, together with a scarcity of purchaser curiosity and bids falling considerably under the benchmark worth.
The authorities had eyed promoting a significant share within the nationwide service, however buyers pulled out, with solely Blue World City submitting a bid of Rs10 billion towards an envisaged minimal bid of over Rs80 billion.
Finance Minister Muhammad Aurangzeb had termed the failed PIA privatisation transfer a “setback” for the federal government however pressured that the International Monetary Fund (IMF) listened to the federal government on this and that privatisation of SOEs would proceed.
The authorities is urgent for the privatisation of loss-making SOEs not solely as a result of fiscal constraints but additionally as a result of it’s a part of the IMF’s demand, which has authorized a $7 billion mortgage for Pakistan.
The minister highlighted that events had proven preliminary enthusiasm throughout earlier bidding rounds — however it didn’t materialise. He emphasised PIA’s potential to develop into a worthwhile entity if restructured successfully.
“PIA operates profitable routes and might be remodeled right into a profit-generating establishment,” Aleem asserted.
Drawing parallels with Air India, he famous that its privatisation succeeded solely after 5 failed makes an attempt, underscoring the necessity for persistence within the course of.
He additionally criticised the Federal Board of Revenue (FBR) for imposing GST on plane purchases, a tax he claimed was not levied globally in that method.
“I urged the FBR to waive GST on new plane purchases, however they continue to be inflexible. This tax has considerably raised prices for buying new planes,” he mentioned, including that such monetary hurdles want decision to make sure easy privatisation.
Aleem additional mentioned that Prime Minister Shehbaz Sharif has prioritised PIA’s privatisation whereas urging different ministries to cooperate to make the method profitable.
He additionally pressured that the federal government ought to tackle monetary liabilities in public establishments earlier than providing them for privatisation.
During the session, the secretary of the Privatisation Commission revealed that buyers had requested Rs26 billion in tax waivers and dedicated to financing Rs10 billion in liabilities.
Despite the challenges, preparations for inviting new bids are underway, with officers pledging a streamlined course of this time.
The privatisation minister reiterated the urgency of PIA’s privatisation, stating {that a} well timed determination was important to reversing the airline’s monetary decline and unlocking its potential as a worthwhile enterprise.
