Bidding for PIA to be held on December 23, says PM Shehbaz

• The prime minister is committed to complete transparency in the privatization process.
• The privatization process is going smoothly: premiere.
• The revival of airlines is linked to the improvement of the tourism sector: PM.

Prime Minister Shehbaz Sharif on Wednesday announced that the bidding process of Pakistan International Airlines (PIA), the first state-owned entity lined up for disinvestment under the policy framework, will be held on December 23.

State media reported that the prime minister made the announcement during a meeting with all business executives and representatives of companies involved in the privatization of the national carrier.

The statements come as Islamabad moves forward with a new push to privatize the national carrier, a key condition under Pakistan’s $7 billion International Monetary Fund (IMF) bailout package.

The government’s previous attempt to privatize the entity failed as a $36 million bid from a real estate firm fell short of the $305 million floor price, with concerns over debt, staffing and limited control.

This time, the government is offering full divestment, has eliminated the sales tax on leased aircraft and is providing limited protection from legal and tax claims. About 80% of the airline’s debt has been transferred to the state.

During today’s meeting, the Prime Minister emphasized that transparency and meritocracy were the government’s top priorities and the offer will be broadcast live across the country.

He said the privatization process was progressing smoothly to restore PIA’s lost identity and align the national airline with modern requirements. “God willing, PIA will soon again live up to its tradition of being ‘Great People to Fly’,” he added.

The prime minister noted that the restoration of PIA’s global flights will benefit Pakistanis abroad, stressing that modernization of the airline is equally vital for the development of Pakistan’s tourism sector.

“To boost tourism, it is necessary to align the national airline with modern requirements,” he noted.

Chief Minister Shehbaz expressed confidence that whichever bidder takes over after the process will “focus all their energies on restoring PIA’s reputation and promoting its progress”.

According to the statement, the participants commended the government for adopting a professional and transparent mechanism to privatize the airline.

“We are targeting Rs 86 billion in privatization revenue this year,” Privatization Minister Muhammad Ali said. Reuters last month. “For PIA, in the last round of bidding, 15% of the revenue went to the government, with the rest remaining within the company.”

Meanwhile, the renewed efforts have attracted interest from local business groups – including Airblue, Lucky Cement, Arif Habib Group and Fauji Fertilizer – with final bids expected later this year.

PIA has resumed flights to the UK, more than five years after the ban was lifted over a fake pilot license scandal in July. Its European flights resumed in January after a four-year ban.

Last month, the secretary of the Department of Privatization told the National Assembly standing committee that the government plans to make the final bid for PIA by mid-December.

Briefing the panel, the secretary said that four default consortia are currently in the final stage of negotiations on trade terms.

He said talks were ongoing with the pre-selected underwriters on the share purchase and shareholder agreements. Discussions to qualify the bid have been going on for the past three days, while approval of the reserve price will be sought from the federal cabinet, the secretary said.