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PIA privatisation enters a crucial phase as bidding opens on December 23. Know about the three bidders, stake details, payment structure, and impact on Pakistan’s economy.

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PIA privatisation 2025, PIA bidding process, Pakistan International Airlines sale, PIA stake sale, Privatisation Commission Pakistan

PIA Privatisation Enters Final Stage as Bidding Opens Tomorrow

Pakistan International Airlines Corporation Ltd (PIAC) is set to enter a decisive phase as the privatisation bidding process opens on December 23, with three bidders remaining in the race. The development marks a significant milestone in the government’s efforts to reform and revive the national flag carrier.

The process will be overseen by the Privatisation Commission, following the exit of Fauji Fertiliser Company Ltd from the bidding process.

Three Bidders Competing for PIA Stake

According to official documents circulated on Sunday, the remaining bidders include:

Consortium 1

• Lucky Cement Limited
• Hub Power Holdings Limited
• Kohat Cement Company Limited
• Metro Ventures (Private) Limited

Consortium 2

• Arif Habib Corporation Limited
• Fatima Fertiliser Company Limited
• City Schools (Private) Limited
• Lake City Holdings (Private) Limited

Individual Bidder

• Air Blue (Private) Limited

These bidders will submit sealed bids as part of a transparent and closely monitored process.

Bidding Schedule and Transparency Measures

As per the Privatisation Commission’s programme:

• Bid submission time: 10:45am to 11:15am
• Bid opening: 3:30pm
• Live broadcast: The entire process will be aired live on television channels

The government has emphasized transparency by ensuring that bids are placed in a sealed box before the reference price is announced.

How the Reference Price Will Be Decided

Chairman of the Privatisation Commission and Adviser to the Prime Minister on Privatisation, Muhammad Ali, explained the procedure in a YouTube interview.

After bid submission:

1. The Privatisation Commission board will meet to determine the reference price.
2. The Cabinet Committee on Privatisation (CCoP) will approve the price.
3. The approved reference price will be announced during the bid opening.

If bids exceed the reference price, an open auction will take place.
If bids fall below the reference price, the highest bidder will be given priority.

Government Approval and Transaction Timeline

Following the bidding:

• The federal cabinet is expected to approve the transaction within days
• Legal documents will be signed with the successful bidder
• The Privatisation Commission will then have 90 days to complete procedures such as:
  • Transfer of properties
  • Settlement of liabilities
  • Transfer of leased aircraft

Transaction Structure: 75% Stake Sale

Key Highlights

• 75% stake in PIA will be offered to bidders
• 25% shares will remain with the government

Out of the bidding amount for the 75% stake:

• 92.5% will go directly to PIA
• 7.5% will go to the national exchequer

The government believes retaining 25% shares will remain a valuable long-term asset.

Option to Acquire Remaining 25% Stake

The successful bidder will have the option to:

• Acquire the remaining 25% stake within 12 months, or
• Leave it with the government

A 12% premium will apply if the remaining shares are purchased.
The valuation of this stake will be conducted after the sale of the initial 75%.

Payment Terms for Winning Bidder

The government has rejected proposals for delayed payments over one year, citing fairness concerns.

Approved Payment Structure

• Two-thirds of the bid amount to be deposited within 90 days
• Remaining one-third to be deposited within one year

According to Mr Ali, delayed payments could allow bidders to exploit changes in PIA’s performance, which would be unfair to the state.

Impact on Economy and GDP Growth

Mr Ali stated that the revival of PIA could significantly impact Pakistan’s economy.

Currently:

• Pakistan’s aviation sector contributes only 1.3% to GDP
• UAE: 18%
• Saudi Arabia: 8.5%

With proper investment and management, PIA’s contribution to GDP could rise substantially.

PIA Fleet, Assets, and Financial Position

Fleet and Routes

• Total aircraft: 34
• Operational aircraft: 18
• Air service agreements with 97 countries
• Landing rights in over 170 countries

Financial Snapshot

• Net profit: Rs11 billion
• Equity: Rs30 billion
• Liabilities: Rs26 billion (to be paid by bidders over five years)

Employees and Job Security

Under the proposed agreement:

• No employee can be terminated for one year
• Salaries, pensions, and perks are fully protected
• Pension liabilities of retired employees will be borne by the holding company

PIA’s workforce has already reduced from 11,500 employees in 2011 to 6,500, reflecting ongoing restructuring.

Why Privatisation Is Necessary

Mr Ali emphasized that PIA is a valuable yet sensitive asset.

“If not managed properly, colossal sums of money will be lost. But with efficient management, PIA can generate mammoth earnings.”

With a population of 250 million, Pakistan offers:

• Large customer base
• Strategic routes
• Valuable landing slots

However, the level of decision-making required, he said, can only be delivered by the private sector.

Can PIA Return to Its Glory Days?

According to the Privatisation Commission chairman, proper investment, fleet expansion, and efficient management could help PIA regain its former status as a leading airline in the region.

The upcoming bidding process will determine whether this long-awaited transformation finally begins.

Final Thoughts

As bidding opens tomorrow, the privatisation of PIA stands at a historic crossroads. With three serious contenders, transparent procedures, and strong economic implications, the outcome could shape the future of Pakistan’s aviation sector for decades to come.

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