ISLAMABAD: Pakistan International Airlines’ (PIA) privatization process is gaining momentum as pre-qualified bidders began due diligence through a virtual data room, while around 9 to 10 independent power producers (IPPs) have shown initial interest in acquiring state-run power distribution companies (Discos) to acquire, signaling rising investor appetite in the government’s fast-tracked privatization push.
Privatization Commission Secretary Usman Akhtar Bajwa told the Senate Standing Committee on Privatization on Tuesday that PIA’s buy-side due diligence has been underway since July 14, with hopes for competitive and good bids. He added that after the UK lifting a five-year ban on PIA, the airline’s is likely to start its flight operations via Manchester by August 14.
On July 8, the Privatization Commission board has pre-qualified four groups including two consortia: one comprising Lucky Cement Limited, Hub Power Holdings, Kohat Cement Company, and Metro Ventures; the other made is Arif Habib Corporation, Fatima Fertilizer, City Schools, and Lake City Holdings. The remaining two prequalified bidders are Fauji Fertilizer Company and Air Blue (Pvt.) Limited.
Meanwhile, Bajwa confirmed “considerable interest” from IPPs in the upcoming privatization of three power Discos—Iesco, Gepco, and Fesco. Currently, 24 state-owned enterprises are on the active privatization list, including 11 loss-making Discos. These Discos own 1,416 properties all over the country.
A Power Division senior joint secretary told the committee that 162 of 450 properties belonging to these three discos are in the process of being transferred to their names to facilitate the sell-off. Of these 162 properties, 83 belong to FESCO, nine to Gepco and 70 to Iesco. While these assets are in the companies’ possession, their titles have not been transferred and remain under the names of provincial governments, Wapda or cantonment boards.
“We are working to clear legal bottlenecks ahead of offering these entities,” he said, noting that clarity on liberalization of electricity market, shifting from a centralized model to one with multiple buyers and sellers. Power division official said that the government wants to open up the market gradually in next four to five years. Separately, the committee—chaired by Senator Afnan Ullah Khan—was informed that Zarai Taraqiati Bank Limited (ZTBL) has accumulated Rs80 billion in bad loans, nearly equal to its equity of Rs88 billion. Adviser to the Prime Minister on Privatization Mohammad Ali said the scale of non-performing loans raises serious concerns.
ZTBL’s president said defaults had touched Rs100 billion in June 2023 but have since dropped due to aggressive recoveries. The bank still posted Rs42 billion in pre-tax profits over two years and paid Rs19 billion in taxes. Bajwa said ZTBL’s privatization could take up to nine months.
The committee also discussed the Petroleum Division’s recommendation to include the Pakistan Mineral Development Corporation (PMDC) in the privatization list—an idea that drew resistance from lawmakers wary of selling off strategic or profitable entities.
