Obstacles to PIA sell-off lifted: minister

ISLAMABAD:

The federal minister for privatization, Abdul Aleem Khan, has declared the revival of PIA flight operation in the European Union (EU) to be an extremely welcome development that will help in selling off the national flag carrier at a better price.

"People are now confident that they will soon be able to travel to Europe on PIA flights. The resumption of PIA's European flight operations is seen as a milestone for the airline's privatization process," Khan said according to a statement issued by the Ministry of Privatization.

The minister expressed hope that after Europe, PIA will soon be operational for flights to the United Kingdom and the United States.

"This will further enhance the airline's reputation and marketability. Various obstacles to the privatization of PIA have been resolved, and pending matters are now being addressed swiftly," he said.

Khan said the International Monetary Fund (IMF) has approved two key issues related to PIA's privatization. These include the removal of the 18% sales tax on new aircraft purchases and the transfer of all PIA's liabilities to a holding company.

He assured that PIA would be sold without any old liabilities or outstanding dues, making the airline more attractive to investors after these reforms.

"The privatization process is progressing rapidly, and good news regarding the transfer of PIA to the private sector is expected soon," he said.

In October, the final bidding process for the privatisation of PIA attracted just one bid of Rs10 billion for its 60% stake. The government had pre-qualified six groups in June, but only a real-estate development company, Blue World City, participated in the bidding process, placing a bid that was below the government-set minimum price of Rs85 billion.

Pakistan was looking to offload a 51-100% stake in debt-ridden PIA to raise funds and reform state-owned enterprises as envisaged under a $7 billion IMF programme.

The Privatisation Commission said it had asked the bidder to match the minimum bid. Blue World City Chairman Saad Nazir, however, stood by its bid. "We wish the government all the best if they don't want to accept our bid," he said during a ceremony.

The European Union Aviation Safety Agency (EASA) on November 30 issued its authorization for PIA.