'Lack of decision-making' behind failure to attract PIA bidders: Fawad Hassan

Former interim minister for privatisation Fawad Hassan Fawad on Sunday expressed surprise over the cabinet’s approval to initiate the privatisation process of Pakistan International Airlines with a sole bidder.

“What was the need for bidding if there was only a sole bidder, who does not have an aviation background? This process harmed the entire privatisation effort,” said the former minister speaking on the Geo News programme Jirga.

The federal government’s latest attempt to privatise its struggling national airline fell through after the sole bidder, Blue World City, offered just Rs10 billion for a 60% stake in PIA, far below the minimum asking price of Rs85 billion, and flatly refused further negotiations.

Following approval from the Cabinet Committee on Privatisation, the final auction of the loss-making PIA was held on October 30.

This bid failure marks Pakistan’s second attempt in a decade to divest the national flag carrier, with a similar effort ending prematurely in 2015, reported The News.

During the talk show, Fawad said that a “lack of decision-making” was the reason behind the failure to attract potential bidders for PIA.

“The privatisation process can’t be completed until you make the right decision at the right time.”

Highlighting his achievements, the former minister added, “For the first time in [Pakistan’s] history, we initiated the privatisation of PIA. There was no meaningful work in this regard before September 2023.”

Fawad said that during the initial four weeks, he realised the aviation division was not serious about the privatisation of PIA. “Hence, I took direct financial control of PIA,” he added.

“We completed the restructuring of PIA,” he said, noting that he reprofiled PIA’s Rs281 billion debt borrowed from local and international banks, capping it at 12% after negotiations. “We saved Rs35 billion per annum due to the renegotiation,” he added.

Speaking on the show, former finance minister Miftah Ismail said, “Neither [Prime Minister] Shehbaz Sharif has any track record of undertaking privatisation [of any state-owned entity] nor any intention.”

Responding to a question, the former minister claimed that the PM and Deputy Prime Minister Ishaq Dar were also not serious about privatisation.

Criticising the current PML-N government, he said, “We don’t know how to run a police station; what is the need to operate an airline?”

Reacting to the Khyber Pakhtunkhwa and Punjab governments' interest in acquiring PIA, the former finance minister, earlier this month, said there were no state-run airlines anywhere around the globe.

"No government in the world operates airlines," Miftah had said as he came down hard on provincial governments’ proposals to buy the national carrier while speaking at the Geo News programme ‘Naya Pakistan’.

In a letter to Privatisation Minister Abdul Aleem Khan, the KP’s Board of Investment and Trade (BOIT) said that they were prepared to offer a bid that would surpass the current highest offer of Rs10 billion.

Later, following the KP suit, the Maryam Nawaz-led Punjab government also expressed interest in acquiring the national carrier.

Taking to PML-N supporters in New York, former prime minister Nawaz Sharif said that his daughter Minister urged him to purchase the PIA and rebrand it as “Air Punjab”.

Commenting on these developments, Miftah said that he didn’t know any province had an airline.

“A province's responsibility is to provide education, health and convenience to the people,” he said regretting that the provinces “do not collect a penny of tax but seek financial assistance from the Centre".

Responding to a question regarding the PIA privatisation fiasco, the former finance minister had claimed that it came with “such pre-requisitions” which discouraged buyers.