The current government is active in completing the privatization process of the national airline (PIA) at an early stage. According to the initial plan, the government wants to complete the privatization of PIA by the current financial year.
PIA was listed for privatization in 2016. However, the previous governments were not able to complete the process of privatizing the national airline
In line with the latest developments in the privatization of PIA, the Privatization Commission has approved a pre-qualification committee to scrutinize the eligibility, funding for bids, and expressions of interest of companies seeking to purchase PIA. .
According to Privatization Commission Board spokesperson Ahsan Ishaq, the eligibility criteria for privatization of PIA have been approved in the board meeting chaired by Federal Minister for Privatization Abdul Aleem Khan. Under this, the value of the bidder has been declared to be at least 30 billion rupees.
In the case of a consortium, the total value of the consortium should be 30 billion rupees (10 million dollars), while the value of the lead bidder must be 8 billion rupees (25 million dollars).
The bidding consortium will also have to demonstrate that they have a gross annual revenue of 200 billion rupees ($700 million) as a foreign airline enterprise.
The spokesperson of the Privatization Commission has said that bids have been invited for the auction of 51% shares of PIA, while the deadline for submission of the qualification statement has been fixed for May 3.
At present, the government has a 96% stake in PIA, but the government wants to sell PIA by June this year.
PIA balance sheet is clear
In another major development on the privatization of the national airline, all losses, liabilities and debts of the entity have been transferred to the holding company.
According to the top officials of the Privatization Commission, the Pakistan Stock Exchange has been informed about the clear balance sheet of PIA.
According to officials, the airline’s debt of Rs 830 billion has been transferred to PIA Holding Company, while PIA Corporation Limited will have a debt of Rs 202 billion. Banks will have to pay 167 billion rupees for operations and 35 billion rupees for employees.
How much is PIA’s loss?
The national airline is currently facing the highest loss in history. PIA has a total debt of 600 to 625 billion rupees.
According to the annual report of PIA 2022, the annual loss of the organization was 88 billion, which is also continuously increasing.
According to PIA’s financial results for the first six months of 2023, the loss of the first six months of the national airline was $60 billion. However, the full financial results of last year were not announced.
Privatization is likely to be completed by June 24
According to the Federal Privatization Commission, which works on the privatization of loss-making institutions, the process of privatizing PIA is likely to be completed by June 24.
According to officials, the IMF has demanded to complete the process of privatizing PIA in the current financial year itself. The government is serious about completing the privatization process within the stipulated period.
In this regard, PIA spokesperson Abdullah Hafeez Khan said that the stages of PIA privatization are going through the set timeline. If no further delay is faced, the privatization can be completed on schedule.
According to the data of the Privatization Commission, more than two crore passengers have traveled in PIA in 2023. The national airline carries an average of over 5 million passengers annually to 34 countries.
The Privatization Commission further states that PIA has 97 profitable international routes. PIA operates 260 flights in a week.
The Privatization Commission has also reported that air travel in Pakistan is growing by 5.5% annually.
Irfan Elahi, the former chairman of PIA, has told Urdu News that ‘it depends on the procedure of privatization of the national airline as how long the process of privatization will be completed.’
He said that this privatization will be considered a success if the government succeeds in securing the buyer of PIA and its own interests.
According to Irfan Elahi, it is also important to consider all the interests of PIA employees and human resources in a successful privatization.
Talking about the reasons why the privatization of PIA was not completed in the past, he said, “When he was the head of the national airline, we had to face legal hurdles at that time.”
The government first wanted the complete privatization of PIA, but then a law was passed in this regard, after which 51 percent of shares of PIA can now be sold. Now there is a clear target in front of the government, according to which it has to move forward.
