The government’s push to privatize Pakistan International Airlines (PIA) has encountered new hurdles, as prospective buyers have refused to take on the airline’s outstanding dues to the Federal Board of Revenue (FBR) and the Civil Aviation Authority (CAA).
During a meeting of the Senate Standing Committee on Privatization, chaired by Senator Afnan Ullah Khan, Secretary Privatization Commission Usman Bajwa revealed that PIA owes Rs. 28 billion to the FBR and Rs. 7 billion to the CAA.
Bidders have demanded changes to the transaction framework, insisting they will not assume responsibility for these liabilities.
To address the issue, the Privatization Commission said proceeds from the sale of PIA’s Roosevelt Hotel in New York and a hotel property in Paris, expected to fetch over Rs. 500 billion, will be used to clear the airline’s debts.
The Roosevelt Hotel’s 17-storey building is set to be demolished, pending U.S. approval, with a new 1.3 to 1.4 million square foot structure planned for the site. A new financial advisor for the hotel’s lease-out is expected to be appointed next month.
I had personally requested the Chairman Privatization Board that we are interested, we are taking foreign funding, please extend the uptime a little so that we can get the bid in time, we could not get the bid in time, we have given the government a return that we will keep 3500 employees and we will make PIA one of the best airlines in the world, we will invest 1.5 billion dollars more on PIA, we had arranged all the funds for the development of PIA, but the government, the Privatization Board, I don’t know why, is in such a hurry to give PIA to our own local people who are related to the cement factory, the fertilizer company or corporations that have no connection with the airline. I have a request to the Prime Minister of Pakistan.I request the Prime Minister of Pakistan to cancel the current bidding process of PIA and announce a rebidding so that we can get foreign funding. There are many international groups that want to invest in PIA and want to buy PIA, and outside groups can also make very good offers and buy it at a very good price. Through you, I request the Prime Minister of Pakistan to cancel the current building of PIA and announce a rebidding so that PIA can be given to an international aviation group at a good price so that Pakistan benefits. It is not the job of cement factory owners to run the airline above international standards, nor can fertilizer companies understand airline businesses.