After privatisation setback, Pakistan considers G2G sale for PIA

ISLAMABAD: After failing to secure the necessary bid for the privatization of Pakistan International Airlines (PIA), the current government is now considering a government-to-government sale of the national airline, according to media reports.

The Cabinet Committee on Privatisation (CCoP), led by Deputy Prime Minister and Foreign Minister Ishaq Dar, turned down a Rs10 billion offer from Blue World City based on a recommendation from the Privatisation Commission Board.

In light of this setback, Federal Minister for Privatisation Abdul Aleem Khan reaffirmed the government's commitment to privatizing the airline, stating that the process will be conducted in a "more effective manner."

Moreover, the official informed the publication that the administration led by Prime Minister Shehbaz Sharif is assessing direct G2G arrangements with countries like Qatar, other Gulf states, and China, as these nations have historically extended financial aid to Pakistan and could significantly assist in the airline’s privatization.

PIA has not reported a profit for almost two decades and carries Rs200 billion in liabilities.

The government is contemplating eliminating the airline's debt to draw in potential buyers, having previously transferred around three-quarters of its $3 billion debt to government accounts during the last privatization effort, as stated by the official.

"This represents another hurdle in the attempts to privatize PIA," noted an official, adding: "It is essential for us to reassess the terms and investigate alternative strategies to enhance the airline's appeal to investors."

Notablly, Punjab and KP governments have also shown 'willingness' to buy the PIA.