Pakistan rejects Rs 10 billion offer for 60 stake in PIA

Islamabad, Nov 15 (PTI) Pakistan has rejected a paltry Rs 10 billion offer from the sole bidder seeking a 60 per cent stake in its national carrier PIA, it emerged on Friday.
     Blue World City, a real-estate development company, had made the offer on Oct 31 when authorities made a botched attempt to sell the Pakistan International Airlines (PIA). But its bid was lower than the minimum price of Rs 85 billion set by the government.
     On Wednesday, the Privatisation Commission’s board rejected the sole bid and referred the matter to the Cabinet Committee on Privatisation (CCOP) for further review.
     The CCOP in a meeting on Thursday, chaired by Deputy Prime Minister and Foreign Minister Ishaq Dar, decided to accept the recommendation of the Privatisation Commission’s Board and rejected the bid.
     “The CCOP reiterated the resolve of the government to divest PIACL (Pakistan International Airlines Corporation Limited) through privatisation or G2G mode,” the statement released by the Office of the deputy prime minister read.
     Earlier, the government had pre-qualified six groups in June, but only the Blue World City participated in the final bidding process.
     Pakistan was looking to off-load 51-100 per cent stake in the debt-ridden PIA to raise funds and reform state-owned enterprises but the bid showed that the process may be a non-starter.
     PIA owns assets worth approximately Rs 152 billion, including aircraft and operational routes. But it has around 7,100 employees, with over 2,400 working on a daily wage basis, who had been a hindrance in its privatisation.
     It is also making losses, owes billions of rupees in debt and its fleet is aging and any investor would have to make substantial investment to make it a profit making entity.
     The move to sell the PIA and other loss-making state-owned enterprises is part of the deal with the International Monetary Fund that recently agreed to provide USD 7 billion to Pakistan.

(This story has not been edited by THE WEEK and is auto-generated from PTI)