Pakistan advances PIA privatization, approves Roosevelt Hotel joint venture plan

Pakistan has prequalified four bidders for the strategic divestment of its national carrier, Pakistan International Airlines Corporation Limited (PIACL), marking a major step in the country’s privatization and economic reform agenda.

The decision was made during the 237th session of the Privatization Commission (PC) Board and later endorsed by the Cabinet Committee on Privatization (CCOP), both of which convened on Tuesday. Adviser to the Prime Minister on Privatization, Muhammad Ali, chaired the PC Board meeting.

The shortlisted bidders for PIA are:

• A consortium of Lucky Cement Ltd, Hub Power Holdings Ltd, Kohat Cement Company Ltd, and Metro Ventures (Pvt) Ltd
• A consortium of Arif Habib Corporation Ltd, Fatima Fertilizer Company Ltd, City Schools (Pvt) Ltd, and Lake City Holdings (Pvt) Ltd
• Fauji Fertilizer Company Ltd
• Air Blue (Pvt) Ltd

The bidders were selected after evaluating five Statements of Qualification (SOQs). These prequalified entities will now move to the buy-side due diligence phase, a key step in what could be Pakistan’s first major privatization in nearly 20 years.

Restructuring PIA, a loss-making state-owned enterprise (SOE), is considered vital to fulfilling commitments under Pakistan’s $7 billion bailout agreement with the International Monetary Fund (IMF).

In a separate but related development, the CCOP also approved a joint venture transaction model for the Roosevelt Hotel in New York, a high-profile but underutilized state-owned asset.

Based on recommendations from the Privatization Commission and financial advisors, the joint venture structure was selected over options such as outright sale or long-term lease.

The government said the model aims to maximize long-term value, reduce fiscal risks, and offer flexibility and potential exit strategies.

The Roosevelt Hotel, located in midtown Manhattan, has long been viewed as a potential revenue source but has faced delays in decision-making.

Privatization Commission Chairman Muhammad Ali stressed the government’s focus on transparency, competition, and value optimization throughout the privatization process.

“These decisions show the government’s resolve to push forward with investor-friendly, market-based reforms,” he said.

Pakistan is under increasing fiscal pressure and is looking to privatize major assets to attract both foreign and domestic investment.

The PIA sale and Roosevelt Hotel transaction are being seen as a litmus test for the country’s broader economic reforms.

A previous auction of the Roosevelt Hotel in 2024 had attracted only one bid, Rs10 billion ($36 million) from Blue World City for a 60% stake. The government rejected the offer, as it fell far below the Rs85 billion ($305 million) floor price.