Khyber Pakhtunkhwa government expresses interest in PIA ownership

Pakistan’s Khyber Pakhtunkhwa (KP) government has expressed interest in participating in the privatization of Pakistan International Airlines (PIA) and intends to offer a higher bid than Blue World’s PKR 10 billion ($357 million).

The KP Board of Investment and Trade sent a letter to Federal Minister for Privatization Aleem Khan, indicating their intent to bid for PIA.

The letter, on behalf of the Chief Minister and the people of KP, highlights PIA as a critical national asset and emphasizes the importance of retaining it within the national fold.

Chief minister directed the board to pursue this acquisition to keep the airline under government control, rather than allowing it to be transferred to a private or foreign entity.

The KP Board of Investment and Trade is prepared to offer a bid higher than the only offer of PKR 10 billion by Blue World City consortium, aiming to maintain a competitive position in the bidding process.

They have requested that their proposal be considered as a viable option to keep the National Flag Carrier within a provincial government structure, preserving PIA's legacy.

They have also asked for an immediate meeting to present their proposal in detail, discuss their strategic vision for PIA, and demonstrate their capacity to meet and exceed the highest bids.

The Pakistan government had received just one bid of PKR 10 billion, which is well below the government-set minimum price of PKR 85 billion for a 60% stake in PIA. The airline reported a loss of over PKR 76 billion in the first nine months of 2023, with total liabilities at PKR 831 billion and total assets valued at PKR 152 billion.

Pakistan has faced ongoing challenges in privatizing PIA, with previous attempts hindered by labor union protests and political opposition. Recently, Islamabad assured the IMF that it will move forward with plans to privatize PIA and anticipates completing the transaction by the end of August 2024.

During the 2013-2016 EFF program with the IMF, Pakistan had agreed to privatize 26% of PIA's shares to strategic investors and obtain parliamentary approval for amendments to the PIA Act.