Government to invite fresh bids for PIA privatisation

ISLAMABAD: The Federal Minister for Privatisation, Abdul Aleem Khan, announced that the government will invite fresh bids for the privatisation of Pakistan International Airlines (PIA). This decision comes after the previous round of bidding failed to attract sufficient interest or competitive offers.

The Senate Standing Committee on Privatisation, chaired by Senator Talal Chaudhry, held a session where Minister Khan briefed members about the ongoing challenges and future plans for PIA’s privatization. Discussions highlighted the lack of interest from buyers and the bids falling significantly below benchmark expectations.

Minister Khan shared that PIA is currently burdened with total losses of PKR 830 billion, with a deficit of PKR 45 billion at the time of privatisation deliberations. He emphasised that although there is potential for PIA to become profitable, significant steps are required to prepare it for privatisation.

Challenges and Comparisons
Khan drew parallels with the privatisation of Air India, which took multiple attempts before finding success. “If PIA is to be privatised, the government must adopt a bold approach,” he stated. He also highlighted PIA’s profitable routes, indicating its potential for revival under proper management.

The Minister criticised the Federal Board of Revenue (FBR) for imposing General Sales Tax (GST) on new aircraft purchases, a practice he noted is not followed globally. He urged the FBR to remove such taxes to make the airline more attractive to investors.

Investor Proposals
The Secretary of the Privatisation Commission revealed that previous investors had proposed waiving PKR 26 billion in taxes and financing PKR 10 billion as part of their offers.

Khan stressed the need for collaboration across ministries and immediate action on privatisation to address PIA’s financial woes and unlock its profitability. The government aims to create a framework that resolves the airline’s financial liabilities before privatisation resumes.

The announcement reflects the government’s renewed focus on reviving interest in PIA’s privatisation as part of broader economic reforms.