Analysts slams government's handling of PIA privatisation

Pakistan International Airlines (PIA) privatisation fiasco sparked concerns among political and business analysts, who argued that the government’s lack of preparation and competitive effort could lead to the national airline being sold for peanuts.

In the bid to privatise the struggling national airline, a private company offered to buy it for just Rs10 billion. 

Bidding for a 60% stake in PIA was opened in Islamabad on Thursday, with only one party, the Blue World City Consortium, submitting an offer.

Blue World City, a real estate development company, proposed Rs 10 billion, which is about 12% of the minimum expected price of Rs 85 billion set by the government.

PIA, a public limited company with approximately 96% of its shares held by the government, has been suffering substantial losses for years, costing the national exchequer billions annually. 

Despite management changes and previous attempts to turn it around, the airline remains in financial distress, and past privatisation efforts have also failed.

The government has yet to decide whether to accept or reject Blue World City’s bid. The federal cabinet will review the Rs10 billion offer.

Analysts expressed outrage over what they view as a lack of professionalism in handling such a significant issue, with some suggesting that the authorities failed to conduct adequate preparations for the privatisation process, resulting in this setback.

“A real estate company's sole bid to purchase PIA is disturbing. Government must ensure that all PIA landed is separated from the company's asset portfolio n leased out to PIA  purchaser with "no land use change" proviso,” renowned economist Dr Kaiser Bangali stated on X.

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A real estate company's sole bid to purchase PIA is disturbing. Government MUST ensure that all PIA landed is separated frm the company's asset portfolio n leased out to PIA purchaser with "no land use change" proviso.

— Dr. Kaiser Bengali (@kaiserbengali) October 31, 2024

Political commentator Uzair Younus drew parallels between the privatisation processes of India's and Pakistan's national airlines and said, “ Air India was bought out by Tata, a conglomerate with a stellar reputation and track record of operating in sophisticated industries.

“PIA, on the other hand, has received a single bid from a property developer with 200+ FIRs against it!“ he added.

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Air India was bought out by Tata, a conglomerate with a stellar reputation and track record of operating in sophisticated industries.

PIA, on the other hand, has received a single bid from a property developer with 200+ FIRs against it!

Go figure.https://t.co/dQT7sYrlJu

— Uzair Younus عُزیر یُونس (@UzairYounus) October 31, 2024

Lawyer Jibran Nasir highlighted that the sole bidder for PIA is allegedly involved in corrupt practices.

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Some weeks ago an audio message from the CEO of #BlueWorldCity, Ch. Saad Nazir, was circulating online about the accusations regarding the housing society developing and expanding without a NOC. The CEO to comfort existing and attract new investors simply concluded "Aap samjhain… pic.twitter.com/8MFObIbZOy

— M. Jibran Nasir 🇵🇸 (@MJibranNasir) October 31, 2024

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We are not a serious country. pic.twitter.com/PnbWBTPUGj

— Abdul Moiz Jaferii (@Jaferii) October 31, 2024

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What has happened on earth as bidding of just Rs 10 billion against base price of Rs 85.1 billion for PIA is nothing but simply a joke. Neither we can run nor could privatise properly. Some heads must roll over on this criminal planning of Privatisation Min. Wasteful expenditure

— Mehtab Haider (@haider_mehtab) October 31, 2024