Pakistan’s Airline Privatization Stumbles with Sole Low Bid

Pakistan International Airlines (PIA) has faced a setback in its privatization efforts, receiving only one bid during the recent bidding process held on October 31.

The real estate group Blue World City offered just $36 million for a 60% stake in the airline, a figure that falls significantly short of the government’s minimum price expectations.

The bidding ceremony took place in Islamabad and was broadcast live on the state-run PTV channel. This privatization initiative is part of Pakistan’s agreement with the International Monetary Fund (IMF), which has pledged $7 billion to the country.

The government aimed to offload a 51-100% stake in the financially struggling PIA to generate funds and reform state-owned enterprises. However, the solitary bid indicates that the process may be stalling.

Initially, six groups were pre-qualified for the bidding in June, but Blue World City was the only participant in the final round. In response to the low offer, the Privatization Commission has requested the bidder to match the minimum bid.

Despite this, Blue World City chairman Saad Nazir expressed confidence in their proposal, stating, “We wish the government all the best if they don’t want to accept our bid.”

PIA’s assets are valued at approximately PKR 152 billion, which includes its aircraft and operational routes.

However, the airline employs around 7,100 staff members, with over 2,400 on daily wages, creating significant challenges for privatization efforts. As it stands, the future of PIA’s privatization remains uncertain as the government navigates these hurdles.