ISLAMABAD: Pakistan’s Privatization Ministry said on Friday the national airline’s privatization has stalled after months of efforts, as the sole bid came in “too low” compared to government expectations, which the airline employees’ union and an economist called a “major embarrassment” for the authorities.
The national flag carrier received a Rs10 billion ($36 million) bid from real estate development company Blue World City a day earlier for 60 percent Pakistan International Airlines (PIA) stakes during a televised auction, far below the minimum price of Rs85 billion ($305 million) set by the government.
The country plans to sell more than 51 percent of its stake in the loss-making national air carrier as part of economic reforms Islamabad agreed to with the International Monetary Fund (IMF) for a critical 37-month, $7 billion bailout deal approved in September.
Pakistan’s government pre-qualified six groups in June, but only the real estate development company met a Tuesday deadline to submit final documents to participate in the auction.
“The airline’s sale process has stalled for now, but the Privatization Commission Board will review the bid offer in its next meeting,” Dr. Ahsan Ishaq, a spokesperson for the Privatization Ministry, told Arab News, without specifying a date for the meeting.
“Finally, the matter will go to the federal cabinet for approval, but obviously, the bid is too low compared to government expectations,” he added. “Therefore, it may not receive formal assent.”
The state-owned Pakistan Television broadcast the bidding process live, with Blue World City as the sole bidder.
The $36 million bid was read out in front of government officials and financial advisers, which the PIA employees’ union later described as a “major embarrassment” for the authorities.
“The government should add at least twenty planes to the PIA fleet on dry lease to make it a profitable airline instead of selling it for peanuts,” said Hidayatullah, president of the PIA employees’ union, who goes by a single name, while speaking to Arab News.
“We will not allow the privatization of this national asset, and we will launch a nationwide protest if the government goes ahead with this bid,” he said.
During the bidding event, Blue World City Chairman Saad Nazir refused to match the government’s minimum price of Rs85 billion, saying, as per his company’s assessment, the offer made was “the best decision.”
The government’s initial plan was to finalize the PIA sale on the country’s Independence Day, August 14, but the plan was delayed following requests from bidders who were awaiting the airline’s latest audited accounts, aircraft lease agreements and clarity on flights to Europe, which are currently banned.
The auction was postponed twice, first to September and then to October, but neither event materialized.
Dr. Vaqar Ahmed, a senior economist, said the government had failed to “hunt potential investors” for PIA ahead of the formal auction and did not organize roadshows to market the airline’s assets to attract major investors.
“Major foreign investors have already expressed serious reservations about difficulties in repatriating their profits from investments in various sectors,” he told Arab News. “Therefore, they were apprehensive about joining the bidding process.”
“The government should have initiated measures to address the concerns of major investors and businesses ahead of formally launching the auction process for PIA to attract a fair price for the airline,” he continued.
Official data available to Arab News shows that there are 88 commercially operated state-owned enterprises in Pakistan, with collective losses amounting to Rs730.258 billion ($2.61 billion) in the fiscal year 2022.
In its five-year privatization plan ending in 2029, the government approved 24 state-owned enterprises for sale, including PIA.
With a fleet of 34 aircraft comprising 17 Airbus A320s, 12 Boeing B777s, and 5 ATRs, PIA loses market share to Middle Eastern carriers, who dominate with 60 percent due to the absence of direct flights to key destinations.
The carrier has air service pacts with 87 countries and landing slots at significant destinations such as London Heathrow.
The reorganization plan will separate aviation-related operations from non-core components, thereby freeing the operating subsidiary from a large portion of legacy debt.
Pakistan’s national airline sale stalls as bid falls short of government expectations
https://arab.news/gxmwb
Pakistan’s national airline sale stalls as bid falls short of government expectations
- Sole bidder Blue World City declines to meet government’s minimum price of $305 million
- PIA employees’ union labels the stalled sale an ‘embarrassment’ for Pakistani authorities
Bahraini commander witnesses Pakistan Navy passing-out parade in Karachi
- Rear Admiral Ahmed Mohamed bin Ali says it is a matter of immense pleasure for him to review commissioning of personnel at his alma mater
- The training you have received has prepared you to step into a challenging yet deeply satisfying career, he tells young officers, midshipmen
ISLAMABAD: Rear Admiral Ahmed Mohamed Ebrahim Al bin Ali, commander of Royal Bahrain Naval Force, witnessed passing-out parade of Pakistan Navy’s 124th Midshipmen and 32nd Short Service Commission Course in Karachi, where he spoke with the newly inducted officers.
The passing-out parade was held at the Pakistan Naval Academy, at which Commandant Commodore Zia-ur-Rehman congratulated 90 midshipmen and 38 cadets who had completed short service commission after going through academic and training phases.
In his address, Rear Admiral Ali said it was a matter of immense pleasure for him to review the commissioning of personnel at his alma mater, the Pakistan Naval Academy, which he had joined as a cadet in February 1983.
“You must be confident and self-assured that you have been trained at one of the best naval academies of the region. The training you have received at Pakistan Naval Academy has prepared you to step into a challenging yet deeply satisfying career,” he told the young officers and midshipmen.
“It has equipped you with essential military and academic skills and you should spare no effort to build up on these to achieve excellence in your professions.”
Pakistan armed forces have long been training cadets and officers from friendly countries. Currently, the Pakistan Naval Academy is training future officers from Bahrain, Djibouti, Iraq, Sri Lanka and Turkiye.
The Bahraini commander said that being here as the chief guest had taken him back to yesteryears and he would have flashbacks of the familiar sounds and aura of this naval academy.
“I cannot help but marvel at the wonderful transformation that has taken place since my days,” he said.
Pakistan and Bahrain have maintained close diplomatic, security, trade and defense relations and have undertaken joint training and security initiatives, besides regular high-level exchanges.
Bahrain’s Read Admiral Ali met Pakistan Naval Chief Admiral Naveed Ashraf earlier this week, according to Pakistan Navy. They discussed matters of mutual interest, regional maritime security and avenues for bilateral naval cooperation.
Earlier in Sept., Pakistan and Bahrain agreed to enhance cooperation in naval training and regional maritime security operations. During the same month, the Bahraini Chief of Defense Staff Lt. Gen. Thiab Saqer Abdulla Al-Nuaimi met with Pakistan’s Air Chief Marshal Zaheer Ahmed Baber Sidhu and expressed Bahrain’s interest in learning from the PAF’s experience in multi-domain operations.
