Pakistan’s national carrier is making headlines since last few months due to all wrong reasons — be it the operations, fake pilot licences, safety issues and drills or non-payment of salaries and dues to its staff. Finally, when the government decided to sell of majority stake in the airline to private players, the airline got a lone bid from real estate group Blue World City offering only $36 million for a 60% stake in the airline. This amount is much lower than government’s expectations of minimum price.
The privatisation committee had set the minimum price of $306 million while the sole bid was offered 8.5 lower than the price of $305 million for majority stake in the carrier. Other six shortlisted groups were disqualified as they did not deposit the initial earnest money and were rendered non-eligible to bid.
Get Latest Mathrubhumi Updates in English
While speaking to The Tribune, Saad Nazir, the owner of Blue World City said: “We have considered the government price and decided to stand with our best price of 10 billion Pakistani Rupees.” Blue World Group has further clarified that it plans to revive the airline by getting aircraft on lease, and seek financial support from Chinese and Turkish investors.
The bidders have made the following demands –
* Immediate dismissal of all employees
* Acquisition of 75% stake in the airline
* Government backing the settlement of outstanding liabilities
* Reduction in the average age of the fleet which translates to induction of newer aircraft.
With the above demands, it is clear that the bidders are not interested in retaining the existing employees of the airlines or assume pension liabilities.
PIA is the fourth largest loss-making government enterprise in Pakistan. This stake sale in PIA is part of Prime Minister Shehbaz Sharif’s agreement with the International Monetary Fund to hive off loss-making PSUs. Hence, Pakistan is attempting to revive the economy by selling loss-making state-owned enterprises, including the national airline as well some energy utilities.