Pakistan Rejects Bid for PIA: A Setback in Privatization Plans

Pakistan has declined a Rs 10 billion bid for a 60% stake in Pakistan International Airlines (PIA) by Blue World City. The offer fell short of the government's Rs 85 billion benchmark. The government remains committed to privatizing PIA amidst its financial challenges.

In a significant development on Friday, Pakistan turned down a paltry Rs 10 billion offer from Blue World City for a 60% stake in its national carrier, Pakistan International Airlines (PIA). The bid, made on October 31, was far below the government's set minimum of Rs 85 billion, prompting the Privatisation Commission's decision to reject it.

The Cabinet Committee on Privatisation (CCOP), under the leadership of Deputy Prime Minister and Foreign Minister Ishaq Dar, accepted the commission's recommendation and dismissed the bid. The Deputy Prime Minister's Office confirmed the government's intention to continue efforts to divest PIACL via privatization or government-to-government initiatives.

Despite previous interest from six groups, only Blue World City participated in the final bidding. PIA's financial woes, including substantial debt and an aging fleet, create challenges for potential investors. The privatization of PIA aligns with Pakistan's arrangement with the International Monetary Fund, which recently agreed on a USD 7 billion support package for the country.

(With inputs from agencies.)