Islamabad: The government has formally initiated the privatization process of Pakistan International Airlines (PIA), which invites the expression of interest from local and international investors for majority share in the national carrier.
According to the privatization Commission, the scheme involves sales between 51% and 100% PIA shares, as well as transferring management control to successful bidders. Interested investors have their EOI till June 3.
To encourage participation, the government has also announced several incentives. These include the purchase of new aircraft or exemption from 18% general sales tax (GST).
Additionally, security and coverage will be provided in some tax and legal matters, the Commission said.
The move also includes transfer of specific liabilities listed on the balance sheet of PIA, aimed at making the proposal more attractive for potential buyers.
This privatization effort is a central component of the government’s comprehensive economic reform agenda, as it wants to reduce the financial burden of the state -owned enterprises, attracting foreign and local investment in the aviation sector.
Privatization push on PIA’s heels comes to post its first annual benefit in 20 years, a milestone that has increased the pace in the government’s plans. Last week, the government said that this privatization commission will issue calls for EOI after approval from the Board.
It marks the second attempt to privatize Piya in recent years. The previous year’s previous attempt failed, only one bid was received, and that too, below the government’s minimum $ 300 million.
In response to the concerns raised during earlier efforts, the government has since transferred the inheritance loan of the PIA to its own balance sheet, which has improved the airline’s financial approach to potential buyers.
On privatization, the Prime Minister’s advisor Muhammad Ali recently said that all previous obstacles have now been addressed. He confirmed that Piya’s sales are being considered as high priority transactions, with the target of completing the process within 2025.
As part of its comprehensive economic reform program, and in line with the terms of the bailout of the $ 7 billion International Monetary Fund (IMF), the government has also planned to privatize power distribution companies and detect strategic options for Piya’s Roosevelt Hotel in New York.
Ali said that the property can be either outright or redeveloped through a joint venture with a top-level developer, potentially unlocked the value five times more, Ali said.
This renewed privatization push reflects the government’s commitment to curb losses from the state -owned enterprises and to attract both domestic and foreign investments in major sectors.
