PIA Privatization Bid Flops: Only One Bidder, Far Below ₹30 Crore Asking Price

PIA Privatization Bid Flops: Only One Bidder, Far Below ₹30 Crore Asking Price

KP bids to acquire PIA

PIA Privatization Bid Flops: Only One Bidder The Khyber Pakhtunkhwa (KP) government has formally expressed its intent to bid for Pakistan International Airlines (PIA), proposing an offer surpassing the current highest bid of Rs10 billion by the Blue World Consortium. In a letter addressed to Federal Minister for Privatisation Aleem Khan, Hassan Masood Kunwar, vice chairman of the KP Board of Investment and Trade (KP-BOIT), indicated the province’s interest in acquiring PIA. Representing the chief minister and KP’s citizens, Kunwar underscored the significance of keeping PIA as a national asset.

The KP government’s letter emphasized the desire to retain PIA under government control, rather than allowing it to be privatized or acquired by foreign entities. As such, the KP administration is prepared to make a higher bid, preserving the airline’s legacy and protecting national interests. The letter requested a meeting with the privatisation ministry to present KP’s strategic vision for PIA, illustrating its capacity to exceed competing bids.

KP-BOIT’s Hassan Masood Kunwar clarified that the province’s bid is not politically driven but rather a genuine effort to prevent PIA from being sold below its value. He noted that the government has already spent substantial funds on the privatisation process, and selling PIA for $35 million would be an injustice to Pakistanis. Additionally, Kunwar highlighted that the Blue World Consortium’s backing includes China Southern Airlines, suggesting KP’s bid represents a nationalistic response to preserve the 70-year legacy of PIA.

The KP government is working with technical and financial partners to ensure PIA’s management will be handled by professionals, removing political influences.

PIA Privatization Bid Flops: Only One Bidder  Efforts by Pakistan to privatize its national airline, Pakistan International Airlines (PIA), faced a significant setback when the only bid received offered just PKR 10 billion (approximately ₹30.25 crore) for a 60% stake—far below the minimum price of PKR 85 billion set by the Shehbaz Sharif administration. According to a PTI report, the bidding event, held at a hotel in Islamabad and broadcast live on PTV, marked part of Pakistan’s commitment to the International Monetary Fund (IMF) as a condition of its recent $7 billion support package.

The government had initially pre-qualified six companies in June, yet only the real estate developer Blue World City participated in the final bid. The Privatisation Commission reportedly asked Blue World City to match the minimum offer set by the government. Chairman Saad Nazir of Blue World City remarked, “We wish the government all the best if they don’t want to accept our bid.” Nazir also expressed intentions to involve Chinese and Turkish investors with aviation expertise in the project.

The Pakistan government aimed to sell between a 51% and 100% stake in PIA to attract investment and overhaul the struggling state-owned airline. With assets valued at roughly PKR 152 billion, PIA’s current challenges include an aging fleet, billions in debt, and a high operating cost due to a workforce of around 7,100 employees, including 2,400 on daily wages. This high labor cost has deterred potential investors. In addition, PIA remains barred from flying to the European Union since 2020, following concerns over the validity of some pilots’ licenses.

PIA Privatization Bid Flops: Only One Bidder  The Pakistan government’s attempt to privatize the struggling Pakistan International Airlines (PIA) attracted only a single bid of PKR 10 billion for a 60% stake, falling well short of the PKR 85.03 billion minimum price set by authorities, according to *The Express Tribune*.

Blue World City, a real estate development company led by Saad Nazir, was the sole participant in the bid, after five other pre-qualified companies withdrew. These companies reportedly backed out due to stringent government conditions, which included requirements on tax liabilities, mandatory investments, and employee retention.

Expressing disappointment over the limited competition, Blue World City’s COO, Seham Raza, commented, “I wished there would have been healthy competition and feel sad that all other bidders have pulled out.” Initially, the government had considered selling a stake between 51% and 100%, but later decided on a 60% share. Additionally, the government denied bidders’ requests for tax breaks and duty reductions, and specified that the buyer would need to invest between $500 million and $700 million to secure PIA’s future operations.