The government has informed the Senate Standing Committee on Privatization that the privatization of Pakistan International Airlines (PIA) will take place on December 23, with all outstanding matters expected to be finalized by December 19. Secretary Privatization Commission Usman Bajwa told the committee that the prospective buyer of PIA will be exempted from paying sales tax on the purchase of new aircraft. He said several financial and tax-related hurdles that affected the previous privatization attempt have now been resolved.

Officials clarified that, unlike the last attempt, the investor will not be required to pay Rs33 billion in outstanding liabilities. The successful bidder will also not bear Rs26.6 billion in dues payable to the FBR, nor Rs7 billion owed to Pakistan Aviation. The Privatization Commission informed the committee that 51 percent to 100 percent shares of PIA will be offered for sale. It added that issues related to taxes and incentives have been settled this time, noting that earlier the government could not secure timely GST relief from the IMF.

Officials further highlighted that UK and European routes have now reopened, improving PIA’s commercial outlook. Final commercial terms with investors are expected to be concluded by tonight. The committee was told that investors will be required to submit Rs2 billion as bid security to participate in the bidding process. Following privatization, the new owner will have to arrange Rs80 billion in financing for PIA immediately. The government expressed optimism that the improved terms and route restorations would make the privatization process more attractive for investors.

Credit: Independent News Pakistan (INP)