The government said on Tuesday that the new buyer of Pakistan International Airlines would require investing up to RS70 billion in the loss -making airline over a period of five years, but the final investment needs would only be assessed after the revised accounts are available next month.
The Privatization Commission Secretary Usman Bajwa said the new investors would require investing RS60 billion for RS70 billion in the five years. He gave the declaration during a meeting of the Senate Standing Committee for Privatization, which became chairman of Senator Dr. AFNAN Ullah Khan of PML-N.
Usman Bajwa said new investments will be aimed at economic recovery, operational improvements and increase naval size.
During the last failed attempt to privatize Pia, the government set the investment limit to $ 300 million, and the new border appeared on the lower side compared to the last time. One of the possible causes may be the assumption of improved profitability due to the opening of international routes to Europe and the United Kingdom and tax exemptions by the lease of aircraft.
Usman Bajwa said Pia has decided to start flights to Manchester from August 14, after the United Kingdom lifted a ban on Pia aircraft. The ban had been introduced after the last PTI government claimed that the Pia pilots had fake degrees.
The Prime Minister of Prime Minister on Privatization Muhammad Ali said after the meeting that airlines gathered investment requirements would be assessed when the revised financial accounts for the end of June are available in the middle of next month.
The secretary’s privatization said there were security concerns about Pia’s North America routes, but efforts were underway to tackle and clear these concerns.
The investor will retain 85% of the bid to invest the money in the airline. The government gets only 15% of bid money.
Pia Fleet Age has also risen to 18 and a half years, and the new investor had to double the fleet within five years, the secretary said. CEO of Pia said early this month that the airline is currently flying 19 aircraft.
The government had previously claimed that Pia showed profits of RS26 billion last year, but a report from the Ministry of Finance busted the claim and declared that the airline had a net loss of RS4.6 billion and one -off “accounting profits” of RS26 billion.
The government wants to sell 51% to 100% efforts together with management control. It had also made an attempt to privatize PIA last year, but ended up receiving RS10 billion bids against RS85.03 billion minimum price.
The standing committee also reviewed a report that highlighted complaints about Piacacl’s retirees. It was also revealed that pension obligations for 6,625 employees in Pia made up RS14. 9 billion. When expressing concern, the chairman of the chairman noted Dr. AFNAN Ullah Khan that the pension amount was extremely low, which asked how people are expected to survive.
In response, the Ministry of Privatisation stated that the pension policies are regularly revised and updated annually in line with quotas. The chairman instructed this class and scale wise pension information, including the amount received and the distribution process, was presented in the next meeting of the committee
The secretary said the due diligence process for pre-qualified companies has begun and the field visits would start soon. He said what starts next week; Pre -qualified companies will conduct site visits and participate in expert sessions. These sessions will include orientations about aircraft conditions and routes, as stated by Usman Bajwa.
Officials of the Privatization Commission said the current business model for Pia was not sustainable. They said the privatization prospects have risen after RS45 billion worth more obligations taken by Pia’s balance and parked in the new holding company.
They said the last failed attempt will not affect the new bidding process. Secretary privacy said the government previously delivered RS100 billion annually to keep Pia Operational.
The committee was informed that Pakistan Minerals Development Corporation (PMDC) has not yet been included in the privatization list. Senator Zeeshan Khanzada questioned why this institution was privatized.
Senators further asked the basis for the privatization decision and noted that the Petroleum Ministry lacks the mandate to privatize PMDC.
With regard to Zarai Taraqiati Bank Limited (ZTBL), the committee was informed that it is included in phase one of the privatization list approved by the government in August 2024. ZTBL is currently hiring a financial adviser.
The Presidency Committee questioned the delay in hiring a financial adviser and noted that the last meeting was held on January 31 when the bids were given and evaluated. He expressed concern that almost six months had passed without ending the appointment. The ministry responded that the process typically takes six to eight weeks, but was delayed due to a few demands from a party with almost RS500 million, forcing a restart of the process.
