Pakistan to relaunch PIA privatisation by April-end

ISLAMABAD: Pakistan is set to relaunch the privatisation of its debt-laden national airlines, Pakistan International Airlines (PIA), by the end of April, aiming to complete the transaction before December 2025.

Unlike the previous attempt, the government will tighten pre-qualification criteria to exclude non-serious investors, said Usman Bajwa, Secretary of the Privatization Commission while briefing Senate Standing Committee on Privatization. His remarks came in response to lawmakers’ concerns over real estate developers participating in the earlier process.

“We expect a quicker transaction this time as much groundwork is already complete,” Bajwa said.

The government’s previous attempt to offload a 60 percent stake in PIA, with an option for an additional 15 percent, faltered when potential buyers demanded full control. “This time we are offering between 51 and 100 percent of the airlines,” said Muhammad Ali, the government’s adviser on privatisation, during a Senate committee briefing.

One of the major obstacles in the earlier process — PIA’s negative equity and GST on purchase of aircraft —has now been resolved with the consent of IMF. These liabilities have been shifted to the government’s books, improving the airlines’ balance sheet and making it a more attractive prospect. As a result, the reference price for the sale may also be revised.

In parallel, the government has initiated privatisation of Iesco, Fesco and Gepco through equity sale. FA, a consortium led by Alvarez & Marsal Middle East, will wrap up due diligence by May.

Offi cial said that deliberations continue on the future of PIA-owned Roosevelt Hotel; options include sale, joint venture, or 99-year lease. The CCoP will decide it final course.

House Building Finance Company Ltd (HBFCL) is set to be sold to Pakistan Mortgage Refinance Company Ltd., with bidding documents and a share purchase agreement finalised. The bid is now awaiting CCoP approval before the transaction is finalised. The First Women Bank Ltd (FWBL) is being pursued under a government-to-government deal with the UAE. EVE Holdings is currently conducting due diligence, with commercial terms under negotiation. Zarai Taraqiati Bank Ltd. (ZTBL) is also being prepared for privatisation as a commercial bank. However, lawmakers raised concerns about losing its agricultural focus.

Senator Sarmad Ali suggested that the government impose conditions to preserve ZTBL’s mandate for agricultural lending for at least 20 years post-privatisation or bound it to earmark 50 percent of its portfolio for agriculture sector. The committee agreed to forward the concern to the prime minister.

The committee opposed privatising the Pakistan Mineral Development Corporation, citing its role in supporting jobs and businesses in remote areas of Balochistan and Khyber Pakhtunkhwa. Secretary Privatization Usman Bajwa said PMDC is not on the active list, though the Petroleum Division has proposed its inclusion, with the final decision up to the relevant cabinet committees.

Notably, the government aims to privatise 24 entities over the next five years, while 44 others under review.

Meanwhile, in response to Senators’ inquiries, Additional Secretary of the Power Division said the government has begun the first phase of selling nine defunct state-owned power plants with a combined installed capacity of 1,172 megawatts. Genco Holdings CEO Shahid Mehmood told the Senate committee that firms certified by the State Bank have been engaged to assess asset values. Lakhra Power Plant in Sindh has been sold at Rs2.13 billion. The government expects to raise Rs48 billion from the complete sale of these plants, Additional Secretary of Power Division said.