ISLAMABAD: The bidding process of loss-making Pakistan International Airlines Corporation Ltd (PIACL), the first state-owned entity in line for divestment under the policy framework, is now facing snags and has been postponed for a month.
Though there is no official announcement from the Privatisation Commission on postponing the bidding process scheduled to be held on Oct 1, Secretary Privatisation Usman Akhtar Bajwa told Dawn that the bidding date has now been moved to Oct 31 as the bidders wanted more time before taking part in the process.
The Privatisation Commission prequalified six bidders — Fly Jinnah, a consortium led by YB Holdings (Pvt) Ltd, Airblue Ltd, a consortium led by Pak Ethanol (Pvt) Ltd, Arif Habib Corporation Ltd and Blue World City.
A week ago, the Privatisation Commission board, chaired by Privatisation Minister Abdul Aleem Khan, considered the recommendation concerning the permitted changes under the terms of the ‘Request for Statement of Qualification (RSOQ)’.
Aleem Khan has said that PIACL offers a perfect opportunity for its buyers to earn a profit, given that the entity has excellent potential and only requires fresh investment.
Sources in the Privatisation Commission say the bidders are final, and they can make no change in their consortiums now.
The reserve/floor price will be finalised and approved by the federal cabinet before the bidding. The cabinet will also finalise what percentage of the bid will be paid to the government and what percentage will be invested back in PIACL as a rights issue.
Senior officials of the Privatisation Commission informed the National Assembly Standing Committee on Privatisation that the process of privatising PIA has now reached its concluding stage since investor preparations for bidding are nearing completion. Issues like successful bidders’ investment in PIA to lift the airlines to the level of regular operating airlines and the current ban on PIA operations in Europe are some concerns of potential bidders.
The privatisation secretary has also informed the standing committee that upon completion of the PIA ‘Buy-side due Diligence’, the bidding process will be shown on live media after the approval of the cabinet.
PIACL incurred a loss of Rs75 billion during 2023 while its liabilities increased to Rs825bn, with total assets amounting to Rs161bn.
Published in Dawn, September 28th, 2024
