Khyber Pakhtunkhwa Enters Race to Privatize PIA Amid Fiscal Challenges

Khyber Pakhtunkhwa government steps into the bidding for PIA's privatization, aiming to outbid Blue World City. Challenges loom as Pakistan seeks fiscal recovery through privatization, aided by an IMF program. Only one bid from Blue World City emerged, falling short of the government's expectations.

In an ambitious move to potentially alter Pakistan's aviation sector landscape, the Khyber Pakhtunkhwa government has thrown its hat into the ring for the privatisation of Pakistan International Airlines (PIA). ARY News confirms that the government is gearing up to submit a competitive bid under directives from Chief Minister Ali Amin Gandapur.

The Khyber Pakhtunkhwa Investment Board has communicated with Federal Minister for Privatisation Abdul Aleem Khan, articulating the province's wish to tender a bid. The board emphasized the importance of PIA as a national asset and signaled its readiness to offer a superior proposal compared to Blue World City.

A recent disclosure by the Privatisation Ministry highlighted that only a single bid, amounting to PKR 10 billion for a 60 percent stake, was submitted by Blue World City, significantly undercutting the government's PKR 85 billion benchmark. Reacting to this, the Privatisation Commission urged a bid increase, but Blue World City's chairman, Saad Nazir, held firm on their proposal.

Pushing for much-needed funds through privatisation, Pakistan is aligned with an IMF-supported USD 7 billion program. Part of this initiative includes PIA's sale, offering between 51 percent and 100 percent ownership. However, complexity arises as prospective buyers, during a Senate Privatisation Committee meeting, demand additional conditions, including employee layoffs and tax liability coverage.

The ongoing dynamics of PIA's sale highlight the intricate balance Pakistan must maintain between fiscal recovery strategies and the interests of employees and stakeholders, reflecting the broader challenges of navigating privatisation dynamics.

(With inputs from agencies.)