The Privatisation Commission has informed the Senate Standing Committee on Privatisation that the privatisation of Pakistan International Airlines (PIA) is moving forward with a revised investment plan that requires the buyer to commit Rs70 billion over the next five years.
During the committee meeting, Privatisation Commission Secretary Usman Akhtar Bajwa said that the pre-qualified bidders began their due diligence through a virtual data room from July 14, with hopes for competitive bids. The due diligence process will also include site visits and expert sessions starting next week, where bidders will receive briefings on aircraft conditions and routes.
The Privatisation Commission’s board had pre-qualified four groups, including two consortia: one comprising Lucky Cement Limited, Hub Power Holdings, Kohat Cement Company, and Metro Ventures, and the other consisting of Arif Habib Corporation, Fatima Fertilizer, City Schools, and Lake City Holdings.
The remaining two pre-qualified bidders are Fauji Fertilizer Company and Air Blue (Pvt.) Limited.
As part of the revised business plan, Bajwa stated that the buyer will be required to invest Rs 70 billion over the next five years.
Bajwa confirmed that PIA will resume flights to Manchester on August 14, after the UK lifted a five-year ban on the airline. However, he mentioned security concerns over PIA’s North American routes and emphasised efforts to address these issues.
In addition, the Secretary informed the committee that investors would now receive sales tax exemptions on aircraft purchases to incentivise participation. The government has been injecting Rs100 billion annually to sustain PIA’s operations. The services of the previous financial advisor have been re-engaged to assist with PIA’s privatisation.
During the meeting, concerns were also raised regarding PIA’s pension liabilities. The committee was informed that the pension liabilities for 6,625 PIACL employees had reached Rs14.876 billion.
Senator Dr. Afnanullah Khan, the committee chair, expressed concern over the low pension amounts and directed that detailed pension information be presented in the next meeting.
The committee was also updated on the status of the pre-qualified bidders, with the exclusion of a consortium including ASIL, Serene Air, Bahria Foundation, Mega C&S Holding, and Equitas Capital LLC, as it failed to meet the privatisation criteria.
The pre-qualified bidders have now been invited to the Virtual Data Room to proceed with the due diligence process. A pre-bid conference will also be held for the finalisation of the bid documents.
