ISLAMABAD: The government is “poised to restart the bidding process for the privatisation of Pakistan International Airlines (PIA)” following a failed attempt to sell the loss-making state-owned entity as it received an underwhelming offer of Rs10 billion from a sole bidder.

Federal Minister for Privatisation Abdul Aleem Khan made these remarks during the meeting of the Senate Standing Committee on Privatisation, chaired by Senator Talal Chaudhry, on Monday where he briefed members on the PIA privatisation efforts.

He told the meeting that the government was planning to invite fresh expressions of interest (EOIs) after earlier attempts faced hurdles, including a lack of buyer interest and bids falling significantly below the benchmark value.

The government had eyed selling a major share in the national carrier, but investors pulled out, with only Blue World City submitting a bid of Rs10 billion against an envisaged minimum bid of over Rs80 billion.

Finance Minister Muhammad Aurangzeb had termed the failed PIA privatisation move a “setback” for the government but stressed that the International Monetary Fund (IMF) listened to the government on this and that privatisation of SOEs would continue.

The government is pressing for the privatisation of loss-making SOEs not only due to fiscal constraints but also because it is part of the IMF’s demand, which has approved a $7 billion loan for Pakistan.

The minister highlighted that interested parties had shown initial enthusiasm during earlier bidding rounds — but it did not materialise. He emphasised PIA’s potential to become a profitable entity if restructured effectively.

“PIA operates lucrative routes and can be transformed into a profit-generating institution,” Aleem asserted.

Drawing parallels with Air India, he noted that its privatisation succeeded only after five failed attempts, underscoring the need for persistence in the process.

He also criticised the Federal Board of Revenue (FBR) for imposing GST on aircraft purchases, a tax he claimed was not levied globally in that manner.

“I urged the FBR to waive GST on new aircraft purchases, but they remain rigid. This tax has significantly raised costs for acquiring new planes,” he said, adding that such financial hurdles need resolution to ensure smooth privatisation.

Aleem further said that Prime Minister Shehbaz Sharif has prioritised PIA’s privatisation while urging other ministries to cooperate to make the process successful.

He also stressed that the government should address financial liabilities in public institutions before offering them for privatisation.

During the session, the secretary of the Privatisation Commission revealed that investors had requested Rs26 billion in tax waivers and committed to financing Rs10 billion in liabilities.

Despite the challenges, preparations for inviting new bids are underway, with officials pledging a streamlined process this time.

The privatisation minister reiterated the urgency of PIA’s privatisation, stating that a timely decision was critical to reversing the airline’s financial decline and unlocking its potential as a profitable business.