Blue World City remains the only bidder for PIA stakes

Pakistan is left with only one bidder for a stake in Pakistan International Airlines (PIA) from Blue World City, a senior Privatization Commission official told Nukta.

Blue World City, a real estate project by two construction groups that also owns a news channel in Pakistan, leads a consortium that includes Blue World Aviation and IRIS Communication Limited.

The Privatization Board had shortlisted six pre-qualified bidders in June 2024, but only Blue World City submitted earnest money, a deposit indicating their serious intent to purchase a stake in PIA.

A Bloomberg report quoted Blue World City owner Saad Nazir saying he plans to bid for a 60% stake in PIA in the October 31 auction, the only bidder for this stake. The government will retain the remaining stake.

The auction for PIA is scheduled to proceed as planned on October 31, 2024. Pakistan has been trying to privatize PIA for a long time, but the process has faced several delays. The bidding was initially set for October 1 but was postponed to October 31.

Issues complicating the process include some investors wanting to purchase 65% of the government's shares, while others seek full ownership. There are also concerns about the requirement to retain employees for two to three years, which some believe is impractical.

According to a senior official at one of the six shortlisted bidders, retaining employees increases the "operating liabilities" for the buyer. Additionally, a unique tax on aircraft acquisition in Pakistan is considered "punitive," making the airline non-competitive internationally.

Despite these challenges, the bidding for PIA is set to go ahead, with Blue World City as the sole bidder for a majority stake in the national carrier.