Prime Minister Shehbaz Sharif has expedited the privatisation process of Pakistan International Airlines (PIA), advancing the financial closure deadline to June 1, 2025, instead of the previously planned October timeline.
The move is part of broader economic reforms aimed at reducing the state’s financial burden and streamlining state-owned enterprises.
As per reports, the International Monetary Fund (IMF) has agreed to waive the 18% General Sales Tax (GST) on new aircraft acquisitions once PIA is privatised. The Privatisation Division has been directed to revise the implementation roadmap accordingly.
The prime minister has instructed key ministries, including Aviation (now merged with Defence), Finance, Power, Industries, and Commerce, to establish legal teams to handle potential litigation and ensure smooth implementation of the privatisation programme.
PIA’s liabilities currently stand at Rs45 billion, including Rs26 billion in outstanding taxes owed to the Federal Board of Revenue (FBR), Rs10 billion due to the Civil Aviation Authority (CAA), and pension liabilities making up the remainder. The government is developing a strategy to address these financial burdens, ensuring they do not deter potential buyers.
The National Assembly Standing Committee on Privatisation has clarified that non-core assets will be excluded from the bidding process, with a separate policy being formulated. A consultant has been hired to propose multiple options to the Cabinet Committee on Privatisation (CCoP).
The previous privatisation attempt failed in October last year when the sole bidder, Blue World City consortium, offered Rs10 billion for a 60% stake, far below the Privatisation Commission’s minimum expectation of Rs85.03 billion.
