ISLAMABAD: The Senate Standing Committee on Privatization was informed that the privatization of Pakistan International Airlines (PIA) will take place on December 23.
Adviser on privatization told the committee that the government plans to sell between 51 percent to 100 percent shares of the national flag carrier.
Secretary Privatization Commission Usman Bajwa said that the buyer of PIA will be exempted from paying sales tax on the purchase of new aircraft.
He clarified that the successful bidder will not be required to pay outstanding liabilities, including Rs 26.6 billion owed to the Federal Board of Revenue (FBR) and Rs 7 billion payable to Pakistan Aviation.
In the previous privatization attempt, investors were required to clear liabilities amounting to Rs 33 billion, which negatively impacted investor interest.
The Privatization Commission stated that tax-related issues have been resolved this time, unlike the earlier attempt when GST exemptions could not be obtained from the IMF in time.
Officials also informed the committee that UK and European routes have been restored, improving PIA’s commercial outlook. Final commercial terms with investors are expected to be concluded by Tuesday night.
According to the commission, interested investors will be required to submit a bid bond of Rs 2 billion to participate in the bidding process. Additionally, the successful bidder will have to inject Rs 80 billion in financing immediately after privatization to support PIA’s operations and restructuring.
The government hopes that the improved financial and operational conditions will make the privatization process more attractive to investors this time.
