Standing Committee On Privatization Meets
The 6th meeting of the Standing Committee on Privatization was held today under the Chairmanship of Mr. Muhammad Farooq Sattar, MNA at 11:00 A.M. in Committee Room No. 7, Parliament House, Islamabad.
The Committee was briefed on various aspects of PIA’s privatization, and informed by the Chairman, Privatization Commission that the second attempt for PIA’s privatization is fully prepared, with several returning bidders and parties participating in the process. In the previous round, bidders recommended waiving the 18% GST imposed by the government on the induction of new planes and fleet expansion. They believed that removing this tax would facilitate new aircraft acquisitions and support the growth of the aviation industry. The liabilities of PIA amount to PKR 45 billion, including; PKR 26 billion in taxation dues to the Federal Board of Revenue (FBR), PKR 10 billion owed to the Civil Aviation Authority (CAA) and the remaining amount consists of pension liabilities. The Government presented these concerns to the International Monetary Fund (IMF), and IMF agreed that if PIA is privatized the 18% GST could be removed to encourage Private Sector investment in new aircraft. A mechanism would be devised to address outstanding liabilities, ensuring that financial burdens do not become a hindrance for potential investors. The Committee was further informed that non-core assets are not part of the PIA bidding process. The government is formulating a separate policy for these assets, for which a consultant has already been hired. The consultant has proposed two to three options to the Cabinet Committee on Privatization (CCoP). The Cabinet Committee will adopt one of these options and issue a policy regarding non-core assets.
