ISLAMABAD: The privatisation of Pakistan International Airlines Corporation Limited (PIACL) is facing further delays as potential bidders have requested additional information about the airline.
As a result, the bidding deadline, previously set for October 31, 2024, may be extended.
The Senate Standing Committee on Privatization meeting, held on Thursday, discussed the progress being made on privatisation of PIA and power distribution companies (DISCOs).
‘Privatisation of PIA by end of Oct’
The meeting of the committee chaired by Senator Muhammad Tallal Badar expressed dissatisfaction over the absence of the minister at the meeting.
The privatisation secretary added that the timeline depends on the evaluation and terms, as some bidders are seeking more time, and negotiations are still underway. Additionally, there is the issue of legacy liabilities.
The chair directed the privatisation secretary to finalise the process by 31st October, emphasising that Pakistan’s future depends on it. The chairman also expressed optimism that the privatisation efforts by the PIACL will yield positive results.
Muhammad Tallal Badar emphasised that the committee’s primary concern is receiving further updates on the privatisation transaction, stressing that delays and failure to execute the transaction create complications for the country.
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The officials from the Privatization Commission further said that the bidding process for the PIA is scheduled for October 31 pending federal cabinet’s approval.
Investors have requested an extension in bidding and a revision of several terms, including tax breaks, a reduction in the number of employees, and clarity on the PIA’s liabilities.
They also raised concerns about PIA’s Rs200 billion debt, its employee pensions, and the condition of its fleet.
Bidders are also seeking a 76 percent stake against the original 60 percent offered by the federal government.
Officials said the government will ensure that employee salaries and pension liabilities are protected, and it expects the new administration to retain the employees. The panel was briefed that bidders also sought legal protection against old lawsuits. Participants urged settling matters related to the PIA’s assets and employees before proceeding with privatisation.
The committee also discussed the privatisation of DISCOs. The Power Division officials said the process of hiring a financial advisor for DISCOs would begin soon.
The committee briefly revisited the privatisation of K-Electric, with officials acknowledging that the company had not met its investment obligations.
They said that this time, only DISCOs’ distribution services would be privatised, while generation and transmission services would remain under federal government control.
Copyright Business Recorder, 2024
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