The government on Wednesday defended the privatization of Pakistan International Airlines (PIA), stating that the Rs135 billion bid submitted by the Arif Habib Corporation Limited-led consortium would generate an economic value of Rs55 billion for the national exchequer. Speaking at a press conference, Adviser to the Prime Minister on Privatisation Muhammad Ali and Federal Minister for Information Attaullah Tarar outlined the rationale behind the privatization deal, which has faced criticism and competing narratives.
Ali explained that the privatization’s primary objective is to allow the private sector to manage PIA, as it is better suited to run such businesses. He added that private investment would bring in new aircraft and improve services. The Arif Habib-led consortium, which includes Metro Ventures, Fatima Fertilizer, and City Schools, emerged as the winning bidder for a 75% stake in PIA, offering Rs135 billion, surpassing the government’s initial price expectations. Ali revealed that the total value of PIA post-bid stands at Rs180 billion, with Rs45 billion attributed to the government’s remaining 25% stake.
Ali clarified that while properties of PIA were not included in the deal, the government would receive 7.5% (Rs10.125 billion) of the bid amount, with the remaining 92.5% (Rs124.875 billion) invested in PIA as new equity. The deal also provides incentives to the buyer, such as GST exemptions and no new taxes or levies. Despite the airline’s operational challenges, Ali emphasized that the capital infusion would address PIA’s financial issues, enabling it to become a full-service carrier once again. He also noted that PIA’s biggest asset is its landing rights, with the airline serving 30 destinations and holding agreements with 97 countries.
