The bidding process for the privatization of Pakistan’s national airline, Pakistan International Airlines (PIA), will begin on Thursday. This marks the country’s first major privatization in over a decade, with only one participant expected to join. The cash-strapped nation plans to sell a 51-100% stake in the debt-ridden PIA, aiming to secure funds and reform public enterprises under the $7 billion International Monetary Fund (IMF) program.
The Ministry of Privatization announced that the process would start at 1:30 PM (08:30 GMT), with bids to be opened at 6:30 PM in Islamabad. In June, the government had pre-qualified six groups for the bidding process; however, only real estate development company Blue World City met the deadline on Tuesday to submit the final documents to participate.
Representatives of three groups that chose not to participate told Reuters on condition of anonymity that they were concerned about the government’s long-term commitment to agreements involving the national airline. One executive expressed worries over policy continuity if a new government were to come into power. Prime Minister Shehbaz Sharif’s administration relied on a coalition of various political parties.
PIA’s liquidation is considered a step previous governments avoided due to potential job losses. Concerns over policy continuity and contract enforcement have also been linked to the government’s recent move to cancel power purchase agreements with five private companies earlier this month and its renegotiation of other sovereign-guaranteed contracts.
Sakib Sherani, an economist and head of private firm Macro Economic Insights, stated that changes to Pakistan’s long-term agreements with foreign-financed private IPP projects have “increased the risks of investing and doing business in Pakistan, even with sovereign contracts and guarantees in place.” Other concerns raised by potential bidders include PIA’s deep-rooted issues, reputation challenges, inconsistent government communication, and sectoral taxes.
© AeroHaber.com
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