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Aftab Maken
ISLAMABAD: In a major development regarding the privatization of the national flag carrier, the Arif Habib Group has outpaced all competitors by submitting the highest bid of Rs 135 billion for Pakistan International Airlines (PIA). Thisrecord-breaking offer has been forwarded to the Federal Cabinet for final approval, after which the official decision to transfer ownership to the private sector will be made.
Cabinet committee on privatization meeting
A high-level meeting of the Cabinet Committee on Privatization (CCoP) was held under the chairmanship of Deputy Prime Minister and Foreign Minister Senator Mohammad Ishaq Dar. During the session, the Privatization Commission and the Ministry of Privatization provided a comprehensive briefing on the ongoing process and presented the reference price approved by the Privatization Commission Board for the sale of 75% shares of PIACL.
The committee reviewed all steps taken by the board and recommended the proposal to the Federal Cabinet for final ratification. Deputy PM Ishaq Dar emphasized that all privatization matters must align with government policies and international best practices, ensuring absolute transparency and equal opportunity for all participants.
The bidding process
During the submission of sealed bids earlier today, three major players participated:
- Arif Habib Consortium: Rs 135 billion (Highest Bid)
- Lucky Consortium: Over Rs 120 billion
- Airblue: Rs 26.5 billion
Since the government had set a reference price of Rs 100 billion, and two of the bids exceeded this amount, a second phase of open bidding is also underway.
Strategic goals and terms
The Advisor to the Privatization Commission, Muhammad Ali, stated that the privatization of PIA would open doors for foreign investment and help the airline regain its former glory. Key details of the deal include:
- Share Transfer: While the government decided to privatize between 51% and 100% of shares, today’s bidding focused on 75%. The successful bidder will have a 90-day grace period to acquire the remaining 25% shares.
- Investment: Approximately 92.5% of the bid amount will be reinvested into the improvement and revitalization of PIA.
- Payment Terms: Two-thirds of the payment will be made initially, with the remaining one-third to follow later.
- Consortium Expansion: Bidders are permitted to include two additional parties in their consortium after the bidding process.
This privatization is considered a significant milestone in Pakistan’s economic reform agenda, aimed at breathing new life into the national carrier and reducing the burden on the national exchequer.
