PIA privatisation faces further delays as bidders seek more time and clarity

The privatisation of Pakistan International Airlines Corporation Limited (PIACL) is facing further delays as potential bidders have requested additional information regarding the airline. The bidding deadline, initially set for October 31, 2024, may be extended as negotiations continue.

The progress on the privatisation of PIACL and power distribution companies (DISCOs) was reviewed during a Thursday meeting of the Senate Standing Committee on Privatisation, chaired by Senator Muhammad Tallal Badar. The meeting expressed dissatisfaction over the privatisation minister’s absence.

The privatisation secretary informed the committee that the timeline for finalising the privatisation depends on ongoing evaluations and terms, as some bidders have requested more time. 

Additionally, concerns over legacy liabilities are complicating the process. The chair instructed the privatisation secretary to meet the October 31 deadline, stressing that the outcome of the privatisation efforts is crucial for Pakistan’s future. He expressed hope that the PIACL privatisation would yield positive results.

Senator Badar emphasized that the committee’s main priority is receiving regular updates on the privatisation process, warning that delays could have serious implications for the country.

Privatisation Commission officials explained that the bidding process is pending approval from the federal cabinet. Investors have requested an extension of the bidding period and revisions to several terms, including tax breaks, a reduction in employee numbers, and clarification of PIA’s liabilities. 

Concerns have also been raised about PIA’s Rs200 billion debt, employee pensions, and the condition of its fleet. Bidders are seeking a 76% stake, compared to the original 60% offered by the government.

Officials assured that employee salaries and pension liabilities would be protected, with expectations that the new management would retain the workforce. The committee was also briefed that bidders want legal protection against old lawsuits, and participants stressed the need to resolve issues related to PIA’s assets and employees before finalising the privatisation.