Govt mulling G2G sale of PIA following failed privatisation bid

• Dar-led CCoP rejects Rs10 billion Blue World City's privatisation bid.
• Govt mulling agreements with China, Gulf nations including Qatar.
• These countries can play key role in PIA's privatisation, says official.

ISLAMABAD: Following its failure to attract the required bid for the privatisation of Pakistan International Airlines (PIA), the incumbent government is now weighing a government-to-government (G2G) sale of the national carrier, The News reported, quoting an official on Saturday.

The Cabinet Committee on Privatisation (CCoP), chaired by Deputy Prime Minister and Foreign Minister Ishaq Dar, rejected a Rs10 billion bid from Blue World City on Thursday, following a recommendation by the Privatisation Commission Board.

The development comes after the bid for a 60% stake in PIA fell far short of the minimum price of Rs85.03 billion, leading the government to consider alternative strategies to divest the airline.

Following the setback, Federal Minister for Privatisation Abdul Aleem Khan reiterated the government's resolve to privatise the airline saying that the process will be carried out in a "better way".

Meanwhile, sources say that the Punjab and Khyber Pakhtunkhwa governments have also expressed interest in acquiring the PIA — although the former has denied such reports.

The KP government, on November 1, formally declared its readiness to submit a competitive bid for PIA.

In a follow-up letter addressed to Aleem, KP Board of Investment and Trade (KP-BOIT) Vice Chairman Hassan Masood Kunwar emphasised the strategic importance of the acquisition and requested an update on the status of the proposal.

Furthermore, the official told the publication that the Prime Minister Shehbaz Sharif-led administration was evaluating direct G2G arrangements with countries like Qatar, other Gulf nations and China as these countries have historically provided financial support to Pakistan and could play a pivotal role in the airline’s privatisation.

PIA has not turned a profit in nearly two decades and is burdened with Rs200 billion in liabilities. The government is considering making the airline debt-free to attract buyers, having already shifted about three-quarters of its $3 billion debt to government accounts during the previous privatisation attempt said the official.

"This marks another setback in the efforts to privatise PIA," an official remarked, adding: "We need to revise the terms and explore other avenues to make the airline more appealing to investors".

Furthermore, the CCoP also formed a committee, co-chaired by the minister of state for finance, to evaluate options for privatising the Roosevelt Hotel in New York which is owned by PIA. Additionally, the CCoP directed authorities to finalise the sale of Services International Hotel before its next meeting.

The meeting included key ministers from privatisation, commerce, industry, finance and power, along with federal secretaries from various divisions.