PIA Privatization: Second Attempt Ready, Bidders Return
Islamabad: The second attempt to privatize the national airline PIA is all set, in which several returning bidders and other parties are participating.
Details in this regard were presented in the meeting of the National Assembly Standing Committee on Privatization.
PIA’s liabilities and financial problems
The meeting of the standing committee, chaired by Farooq Sattar, was informed that PIA is facing severe financial difficulties. The national airline has a total of Rs45 billion in liabilities, including:
- FBR tax liabilities: Rs26 billion
- Civil Aviation Authority liabilities: Rs10 billion
- Pension and other liabilities
- Conditions and proposals of bidders
The meeting was informed that in the previous phase, **bidders had demanded that the government remove the 18 percent General Sales Tax (GST) imposed on the purchase of new aircraft and fleet expansion so that it would be easier to acquire new aircraft after privatization.
IMF support
The government also took up this proposal with the International Monetary Fund (IMF). The IMF agreed that if PIA is privatized, 18 percent GST can be removed to promote private sector investment.
Separate policy for non-core assets
The committee was further informed that non-core assets will not be included in the privatization process of PIA. The government is formulating a separate policy for these assets, for which the consultant has suggested two to three different options to the Cabinet Committee on Privatization.
Possible Impacts and Future Actions
Privatization of PIA will increase private sector investment.
Procurement of new aircraft and improvement of services are expected.
The government will use non-core assets under a separate policy.
Government decisions and bidders’ responses are awaited for further progress.
