ISLAMABAD: Pakistan is weighing a government-to-government (G2G) sale of Pakistan International Airlines (PIA) after rejection of a bid to privatise the struggling national flag carrier; an official told The News Friday.
The Cabinet Committee on Privatisation (CCoP), chaired by Deputy Prime Minister and Foreign Minister Ishaq Dar, rejected an Rs10 billion bid from Blue World City on Thursday, following a recommendation by Privatisation Commission Board.
The bid for a 60 percent stake in PIA fell far short of minimum price of Rs85.03 billion, leading government to consider alternative strategies to divest the airline.
Official also said besides G2G option, its privatisation option will be still there. And after CCoP rejection, not it will go to federal cabinet for final decision.
Official said government is evaluating direct G2G arrangements with countries like Qatar, other Gulf nations and China. These nations 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, official said.
“This marks another setback in the efforts to privatise PIA,” an official said. “We need to revise the terms and explore other avenues to make the airline more appealing to investors”.
The CCoP also formed a committee, co-chaired by minister of state for finance, to evaluate options for privatising Roosevelt Hotel in New York which is owned by PIA. Additionally, the CCoP directed authorities to finalise 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.
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