Pakistan Airlines' Privatization: A One-Horse Bid Race
Pakistan's first major privatization in over a decade begins as the government seeks to sell a 51-100% stake in Pakistan International Airlines. Despite initial interest from six groups, only one participant remains due to concerns over government policy continuity and investment risks.
The highly anticipated bidding process for Pakistan International Airlines (PIA) kicks off this Thursday, marking the country's first significant privatization move in more than ten years. The financially strapped nation is attempting to divest a 51-100% stake in the debt-laden carrier, aiming to amass funds and revamp state-owned enterprises, as dictated by a $7 billion International Monetary Fund initiative.
The Privatisation Ministry has scheduled the bidding event to commence at 1:30 p.m. (0830 GMT) with bids officially opening at 6:30 p.m. in Islamabad. Out of the six pre-qualified groups in June, only real estate developer Blue World City submitted the necessary final documents by Tuesday's deadline. Three other groups refrained, citing apprehensions about the government's reliability in maintaining long-term commitments with the national flag carrier.
Executives expressed worries over potential policy shifts with a new government. Prime Minister Shehbaz Sharif's tenure has relied on a coalition of varied political factions. Selling PIA, a contentious move due to the likely job losses, is a step that previous administrations have avoided. Adding to the concerns are recent terminations of power contracts with private entities and renegotiation of other sovereign commitments, raising alarm about investment stability in Pakistan.
(With inputs from agencies.)