PIA privatisation: deadline for EoI submission not expected to be extended further

The deadline for companies to express their interest in buying national carrier Pakistan International Airlines (PIA) is not expected to be extended further, an official at the Privatisation Commission (PC) told Business Recorder on Thursday.

“The number of applications can be confirmed tomorrow after closing time,” the official added.

The deadline to submit expression of interest (EoI) was earlier extended by two weeks (May 3 to May 17) by the Federal Minister for Privatisation, Abdul Aleem Khan, amid unconfirmed reports that local and international companies had shown preliminary interest in PIA’s privatisation.

The minister had also said that three local airlines were also among potential parties and wanted to form a consortium with international companies.

While quoting Bloomberg, Reuters reported that Pakistani tycoon Arif Habib and aviation-based company Gerry’s Group were among the 10 bidders looking to buy a majority stake in the PIA.

However, a week later, Arif Habib Corporation Limited (AHCL) clarified that submitting an expression of interest as well as the Statement of Qualification (SOQ) for the purchase of a majority stake in the PIA did not imply that it had become a bidder yet.

The company confirmed that it had indeed submitted the SOQ after the EoI.

“However, it is crucial to clarify that this submission does not constitute price-sensitive information, nor does it confer upon AHCL the status of a ‘bidder’ as implied in the aforementioned news article,” the company had said in its notice to the stock exchange.

The disposal of the flag carrier is a step past elected governments have steered away from as it is likely to be highly unpopular, but progress on privatisation is expected to help cash-strapped Pakistan pursue further funding talks with the International Monetary Fund (IMF) for a longer and larger bailout programme.

Apart from loss-making entities such as PIA, the government has hinted to rather privatise all state-own enterprises (SOEs), apart from ‘strategic entities’. It did not specify what strategic meant.

However, speaking to a panel discussion at the Pre-Budget Conference held in Lahore on Sunday, Finance Minister Muhammad Aurangzeb had said there are no “strategic state-owned enterprises” and “the concept of a strategic SOE does not exist.”

“There will be a public-private partnership and we will accelerate the privatisation agenda,” he said.

Pakistan’s ambitious privatisation programme – which includes loss-making DISCOs – is seen by many as an important step towards alleviating some of the expenditure burden on the government strapped for cash.

With high taxation and energy tariffs, room for growth has shrunk further with the IMF expecting Pakistan’s GDP to grow by 2% in the current fiscal year.