'New terms' push PIA bidding forward

The Senate Standing Committee on Privatization was informed on Thursday about new conditions set by the companies bidding for the Pakistan International Airlines (PIA) sell-off, leading to the postponement of the bidding date to October 31.

The committee, chaired by Talal Chaudhry, also discussed the privatization of power sector distribution companies (DISCOs), with members raising questions about the privatization of K-Electric.

Privatization Commission (PC) officials provided a detailed briefing on the PIA process. In response to a query about the scheduled October 1 bidding, the officials explained that the interested parties had jointly requested an extension, citing ongoing "due diligence."

They added that the bidding would now take place on October 31, though they could not confirm whether this would be the final date.

The panel chairman expressed concern over the date change, noting that it negatively impacted the national airline's reputation.

The chair inquired whether a pre-bid meeting had been held with the bidding companies. The officials replied that four pre-bid meetings had taken place, adding that some bidders were interested in acquiring 65% of the airline's shares, while others sought 76%.

The chair told the officials that some newspaper reports have indicated that bidders did not want to retain the existing PIA employees. The officials responded that they were currently discussing with the bidders the issue of employees as well as taxes. They further informed the panel that bidders also wanted the government to clear all the taxes.

A couple of bidding companies did not want to retain the existing employees, instead seeking their immediate dismissal, the officials said. The PIA consultant said that the PC wanted the employees retained for two to three years, but the bidders did not agree, "not even for two years".

The consultant added that not only were the bidders opposed to retaining employees for even two years, but they were also unwilling to take on pension obligations. Moreover, the bidders requested guarantees regarding the aircraft's condition, including information about parts, maintenance, and accurate records of the planes.

Committee member Mohsin Aziz said that the PC had done nothing except the privatisation of a few banks in the past 12 years. He suggested that matters pertaining to the employees, assets and default issue be looked after by a single ministry.