ISLAMABAD: Federal government has reached the conclusion to offer 75 percent shares in Pakistan International Airlines Corporation Limited (PIACL) to bidders by October 2024.
The privatisation secretary briefed the Senate Standing Committee on Privatization chaired by Senator Muhammad Tallal Badar held here on Thursday.
The committee members were apprised that the successful bidders have to invest $500 million in the next three years starting from the privatisation of the airline.
PIACL sell-off: Govt to decide shares percentage after bids
The Privatisation Commission has reported generating Rs4,389 million through the sale of state-owned enterprises (SOEs) over the past five years.
However, the commission also incurred significant expenses of Rs1,992 million during this period.
The meeting began with a briefing by the secretary of privatisation on the expenses incurred and proceeds received from privatisation over the last five years.
The committee members critically examined the list of companies where transactions were impeded.
The secretary explained that the National Power Park Company was not privatised by the government.
Similarly, the privatisation of Pakistan Steel Mill was halted due to the withdrawal of bidders, and the Jinnah Convention Center was stalled due to diligence issues and observations from the CDA.
The secretary of privatisation updated the committee on the ongoing privatisation of PIACL. He reported that since 2015, the PIACL has accumulated liabilities of Rs499 billion, with a loss of Rs75 billion in 2023 alone.
The total liabilities have now risen to Rs825 billion, while the total assets stand at Rs161 billion.
The secretary also discussed the corporate and regulatory actions taken following a Cabinet decision.
Additionally, he informed the committee about a meeting held on June 3, 2024, where six interested parties were pre-qualified: Fly Jinnah Limited, Air Blue Limited, Arif Habib Corporation Limited, a consortium led by Y.B. Holdings (Private) Limited, a consortium led by Pak Ethanol, and a consortium led by Blue World City.
The chairman, Senator Muhammad Tallal Badar, stressed that the PIA has a lot of potential.
He stated that there was a time when not a single PIA flight was available for Karachi, and their capacity was exceeded.
The potential is immense, but the PIA’s current state is such that it cannot even bear its burden, let alone anyone else’s.
Senator Tallal emphasised that the PIA transaction is vital for the future of privatisation and the economy of Pakistan.
He stated that the government is fully committed to completing this process by all means, and praised the Privatization Commission for its excellent work. He expressed optimism that this will lead to healthy competition, and after many decades, the transaction will be successfully completed within the next two months.
The chairman of the committee recommended that privatisation officials provide details on the expenditure of privatised DISCOs, along with a financial analysis, in the next meeting.
The chairman also emphasised the need to call upon the Power Division for detailed scrutiny and to outline a way forward for privatisation. The chairman of the committee emphasised that often political interests are put ahead of national interests in one way or another and that ends up against what is in Pakistan’s favour. He also stressed that if PIA or the steel mill collapses, neither the interests of the employees nor those of Pakistan will be protected.
The secretary (privatisation) also remarked that privatisation will only be successful if all stakeholders support it.
If everyone agrees that the concept is sound, then it should be implemented moving forward.
He added that this programme can only succeed if everyone collaborates and provides their support.
Copyright Business Recorder, 2024
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