Islamabad: The government is set to auction a 75% stake in Pakistan International Airlines (PIA), with plans to reinvest the bulk of the proceeds to support the national carrier’s turnaround, officials told a Senate panel on Tuesday.
Prime Minister’s Adviser on Privatisation, Muhammad Ali, said 92.5% of the bidding proceeds would be reinvested in PIA. Despite the privatisation, the airline is expected to require an additional Rs80 billion in financing to stabilise operations and fund growth.
Ali informed the Senate Standing Committee on Privatisation, chaired by Senator Afnan Ullah Khan, that PIA currently operates 18 aircraft and urgently needs fresh investment to induct new planes. He added that the reference price for bidding has not yet been finalised.
Only PIA’s core aviation business will be privatised. Government-owned assets such as the Roosevelt Hotel in New York will remain under state ownership and may be developed through joint ventures rather than outright sale.
Privatisation Commission Secretary Usman Bajwa said the government could potentially sell up to 100% of PIA shares, depending on investor interest and final approvals. He noted that obstacles from a previous privatisation attempt such as Rs33 billion in liabilities and tax-related issues have now been resolved.
Bajwa highlighted that the reopening of routes to Britain and Europe has strengthened PIA’s commercial outlook, and negotiations over final commercial terms with investors are in the final stages.
Following privatisation, PIA will immediately require about Rs80 billion in financing to sustain operations.
On the power sector, officials from the Power Division reported that Guddu, a gas-fired plant, and Nandipur are ready for privatisation. Iesco, Fesco, and Gepco will be privatised in the first phase, with bidding expected by mid-next year.
Instead of outright sales, Hesco and Sepco will be offered under long-term concession agreements, allowing private operators to manage utilities and earn profits only by reducing losses and improving service delivery. A ministerial committee has been formed to resolve remaining issues, and a financial adviser will present final proposals for Nandipur.
The privatization of Pakistan International Airlines (PIA) is scheduled to move forward on December 23.
