Deeply in debt, Pakistan has now found it difficult to run its own national airline PIA (Pakistan International Airlines).
As part of its plan to sell the loss-making airline, the Shehbaz Sharif government organized a bidding process but only one buyer came forward, and that too at a very low price.
In this bidding held at a hotel in Islamabad, a real estate company named Blue World City bid only Pakistani rupees 10 billion for 60 percent stake of PIA, which is much less than the minimum price of Rs 85 billion set by the government.
The event was telecast live on government TV channel PTV. Despite government efforts, relatively low prices and limited buyers have highlighted another crisis for Pakistan.
This effort to sell PIA and other loss-making government enterprises is part of the agreement with the IMF, in which Pakistan is to receive economic assistance of $ 7 billion.
Under the scheme, the Government of Pakistan had pre-qualified six groups in June, but ultimately only one buyer, i.e. Blue World City, participated in the bidding process.
The Privatization Commission requested the company to increase the offer as per the minimum bid, but Blue World City Chairman Saad Nazir said, “If the government does not want to accept our bid, we wish them all the best.”
Privatization of PIA is also complicated because it has about 7,100 employees, of whom more than 2,400 are working on daily wages.
Moreover, PIA’s debt of billions of rupees and its aging aircraft fleet demands huge investment to turn it into a profitable entity.
This effort of the Government of Pakistan has made it clear that privatization of PIA, which is surrounded by debt, is a challenging path.
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