Government not to extend warranties to potential bidders of PIA
The government aims to complete the sale of
Pakistan International Airlines (PIA)
within the year and will not extend any guarantees to potential buyers, Privatization Commission Chairman
Muhammad Ali said on Monday.
In an interview with a private TV channel, Ali
confirmed that the International Monetary Fund (IMF) has approved the
withdrawal of sales tax on the PIA transaction. However, he emphasized that no
additional investor assurances would be offered. “Governments change, and
operating airlines or businesses is not the role of provincial
administrations,” he noted.
Responding to criticism over the slow pace
of privatization, Ali said the process was intentionally structured to start
with smaller, simpler deals—such as the partial transfer of First Women
Bank—before moving to larger and more complex transactions like PIA.
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Discussing government-to-government (G2G)
deals, Ali said Pakistan’s governance issues, corruption, and economic
weaknesses have reduced its leverage. He warned that major economic and
geopolitical powers typically gain the upper hand in such negotiations.
Competitive, transparent privatization processes, he argued, better safeguard
national interests.
Ali also said the federal government has
yet to determine whether NEPRA or the government must approve the transfer of
K-Electric shares, acknowledging that the utility’s original sale lacked
sufficient due diligence.
Looking ahead, the government plans to
privatize Islamabad Electric Supply Company (IESCO), Faisalabad Electric Supply
Company (FESCO), and Gujranwala Electric Power Company (GEPCO) next year.
Authorities are also evaluating a Turkish-style model that grants private
operators long-term concessions to run utilities.
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On airport infrastructure, Ali stated that both Karachi and Lahore airports require roughly $1 billion each for expansion—capital the government expects private operators to bring in once the airports are outsourced.
Turning to the gas sector, he stressed the
need for deep structural reforms, saying, “For the sector to move forward, the
Sui gas companies will have to be sold.”
Source: Aaj TV