Pakistan’s government said it received just one formal bid for the PIA Privatization, from a shortlist of six contenders. The Privatisation Ministry confirmed the single bid on Tuesday, following a Bloomberg report on the development.
Ahsan Ishaq, spokesman for the Privatisation Ministry, said that the unknown bidder deposited the required “earnest money” with the Privatisation Commission, which verified the authenticity of the bid. However, it did not disclose the identity of the potential buyer.
At the initial stage, six companies had shown interest in sharing a portion of PIA. Their names included Airblue Ltd, Arif Habib Corporation Ltd, Fly Jinnah by Air Arabia, YB Holdings Pvt, Pak Ethanol Pvt, and the real estate group Blue World City. Out of all interested, only one had submitted a proper bid for the same, which again speaks to the difficulties and financial risk that would have been involved in revamping the loss-making airline.
Pakistan Finance Minister Muhammad Aurangzeb recently confirmed that the government would privatize Pakistan International Airlines by November of this year, a decision aimed at meeting conditions to receive a 37-month, $7 billion bailout package from the International Monetary Fund. Privatization would be considered a key process in reducing the financial stress on PIA, as it has incurred significant debts over the past few years.
The privatization of PIA has not been without challenges. Its debt and operational issues would have scared off some of the shortlisted bidders from making a formal offer. As the process goes on, stakeholders keenly watch what the government will do towards privatization and whether that will be effective in stabilizing the finances and efficiency of the airline company through involvement from the private sector.
The deal, the government anticipates, will bring on board fresh investments and capabilities that would ‘turn PIA around and relieve the load on the national treasury’.
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