Government to Invite Bids for PIA Privatisation Next Month
ISLAMABAD: The government plans to invite expressions of interest (EoIs) for the privatisation of Pakistan International Airlines (PIA) in early March, aiming to complete the process before the fiscal year ends, an official from the Privatisation Commission confirmed on Tuesday.
Key Developments in PIA Privatisation
- A previous attempt to privatise PIA failed due to investor concerns, but recent progress has cleared key hurdles.
- The International Monetary Fund (IMF) has approved a waiver on the 18% general sales tax for new aircraft purchases.
- The government will absorb PIA’s Rs45 billion negative equity to make the airline more attractive to investors.
During a National Assembly Standing Committee on Privatisation meeting, chaired by MNA Farooq Sattar, Privatisation Secretary Usman Bajwa updated lawmakers on the process:
- The government has already paid $4.3 million of the $6.8 million advisory fee to Ernst & Young, with the remaining amount to be settled upon privatisation.
- PIA’s real estate assets include 26 properties under PIA Holdings and five properties directly under the airline.
- A prime plot in Islamabad’s Blue Area, valued at Rs10-12 billion, remains under review.
- PIA Holdings also owns seven overseas properties, including:
- Scribe Hotel in Paris
- Roosevelt Hotel in New York (whose lease expires in May, requiring a three-month vacating notice).
Pakistan Engineering Company (PECO) Also Under Review
- PECO in Lahore, which was added to the privatisation list last August, was also discussed.
- The company has no active production line and employs only 32 staff members.
- National Investment Trust (NIT) owns 23% of PECO shares, but there are concerns about their transactions on the stock exchange.
- Historically, PECO was a major industrial hub, even manufacturing aircraft parts in the 1960s.
- Since private sector involvement, PECO’s losses have been reduced from Rs2 billion to Rs700 million.
The privatisation committee has directed the Privatisation Secretary to consult with Industries and Law Secretaries and submit a report within 40 days.
