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ISLAMABAD: The government is making another attempt to privatise PIA after the previous effort in which a sole investor submitted a bid of Rs10 billion, significantly lower than officials’ expectations.
The lack of interest shown by the buyers during the first round of privatisation was due to multiple reasons, including the 18 per cent GST on the purchase of new aircraft and the national carrier’s liabilities.
The National Assembly Standing Committee on Privatisation was informed on Monday that the government had removed 18pc GST on the purchase of new aircraft in a bid to spur investors’ interest.
The Privatisation Commission chairman informed the committee that the IMF agreed to remove the tax after the government presented its concerns.
NA committee told 18pc GST on new aircraft removed to attract investors; firm finalised to privatise three Discos
According to information provided to the standing committee, PIA’s liabilities amounted to Rs45bn.
Of this amount, Rs 26bn is owed to the Federal Board of Revenue (FBR) under various taxation charges, Rs10bn to the Civil Aviation Authority, and the remaining is pension liabilities.
The committee was informed that a mechanism would be devised to address outstanding issues, ensuring that financial burdens do not hinder potential investors.
The airline’s non-core assets are not part of the bidding process, and a consultant has been hired to formulate a separate policy for them.
The consultant has proposed two to three options to the Cabinet Committee on Privatisation (CCoP), which will consider them and issue a policy on non-core assets.
The CCoP will adopt one of these options and issue a policy regarding non-core assets.
The committee also discussed the Privatisation Commission (Amendment) Bill 2024 and raised objections to some of its provisions.
The committee sought clarity from the Ministry of Law on whether there was any precedent where the prime minister has been given the authority to make privatisation decisions instead of the cabinet.
The committee directed the ministry to present relevant details in the next meeting.
Later, discussions on the bill were deferred till the next meeting.
The committee also discussed the privatisation of power distribution companies (Discos).
The meeting was informed that in the first phase, the electric power companies of Islamabad, Faisalabad, and Gujranwala will be considered for privatisation.
For this process, two firms submitted their bids, out of which the board recommended the firm Alvarez & Marsal Middle East Limited.
Later, the final bidder gave a presentation to finance and law ministers, who eventually agreed to proceed with the bidder.
Modernisation of airports
The Pakistan Airports Authority (PAA) has announced a comprehensive plan for developing and modernising three airports’ and the construction of a new greenfield at the D.I. Khan airport.
The PAA has engaged national and international consultants from Japan and Switzerland through a bidding process, a PAA spokesperson said in a statement on Monday.
The experts will design modern terminals, enhanced taxiways, and expanded infrastructure to accommodate growing passenger and aircraft traffic.
The ‘Development Plan for Greenfield and Upgradation of Three Airports’ announced by the PPA includes the construction of a new greenfield at the D.I. Khan airport and the upgradation and expansion of Sukkur, Skardu, and D.G. Khan airports.
PAA Director General Air Vice Marshal Zeeshan Saeed stated that modern, efficient and world-class airports were necessary to transform the country into a global gateway.
The PAA has also assigned project directors to accelerate the design phase and oversee execution.
They will act as a bridge between internal and external stakeholders, ensuring seamless coordination and high-quality development, the PAA said.
Additionally, the authority’s Planning and Development Directorate has already initiated significant projects at Karachi and Lahore airports.
These include the successful completion of the runway and external roads network at Karachi’s Jinnah International Airport, while the expansion of Lahore’s Allama Iqbal International Airport was ongoing to improve passenger facilities.
Muhammad Asghar in Rawalpindi also contributed to this report
Published in Dawn, February 4th, 2025
