Pakistan received three bids on Tuesday for the privatisation of its embattled national carrier PIA, in what is seen as a litmus test of Islamabad’s efforts to sell loss-making state firms.
Pakistan International Airlines (PIA), long accused by critics of being bloated and poorly run, has found funds drying up as the government struggles with a balance of payments crisis.
“It was essential to make this process transparent because the biggest transaction of Pakistan’s history is about to take place,” Prime Minister Shehbaz Sharif told his cabinet in a televised statement after the bidding process was broadcast live.
“If the bidding is successful, then the privatisation process will take off,” Sharif said.
Representatives of the three bidding consortia each placed their bids for the 75 per cent stake on offer in a transparent box.
One is led by the private Pakistani carrier Air Blue, another by Lucky Cement, and another by Arif Habib, an investment firm.
The government will unveil a reference price for PIA later on Wednesday and then announce a winner if the minimum is met.
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The sale offer comes after last year’s privatisation attempt failed with just one bid for $36 million — far below the $300 million–$305 million wanted by the government.
Before being delisted from the Pakistan stock exchange, the airline reported a net loss of $437,000 for the 2022 full year on revenue of $854,000.
Islamabad has pledged to divest dozens of its cash-burning enterprises in the finance, energy, industrial, and retailing sectors by 2029 under a $7 billion loan programme agreed with the International Monetary Fund in 2024.
Many of the companies have incurred billions of dollars in losses because of mismanagement and corruption, forcing the government to inject funds to keep them afloat.
Founded in 1955, PIA was a symbol of national pride and rapid growth for years, but its reputation has suffered due to financial losses and safety lapses.
It was banned from flying to the European Union, Britain, and the United States in June 2020, a month after one of its Airbus A-320 jets crashed onto a Karachi street, killing nearly 100 people.
Europe and Britain allowed PIA flights to resume this year, but operations have not yet resumed for the United States.
Just 18 of its fleet of 34 planes are in active service, according to officials.
AFP
