Tag: PIA privatisation

  • PIA bidders reluctant to retain employees after privatisation

    Prospective buyers of Pakistan International Airlines (PIA) have expressed reluctance to retain the airline’s employees. On Monday, the National Assembly panel recommended that the government order the buyer to retain all its employees for five years.

    Express Tribune reported that some bidders also indicated that all employee liabilities up to the bid date should be the government’s headache.

    Muttahida Quami Movement (MQM) leader Muhammad Farooq Sattar, who chaired the standing committee, urged that PIA’s employees be retained for at least five years and that the workers’ union be involved.

    The draft Share, Purchase and Subscription Agreement currently proposes that existing employees, regardless of their position, cannot be terminated, laid off, retrenched, or forced to resign for three years from the completion date, except in misconduct cases. However, Secretary of the Privatisation Ministry Jawad Paul noted that this is still being determined.

    He also stated that PIA has incurred Rs499 billion in losses since 2015, with cumulative losses reaching Rs842 billion.

    The government is required to conduct a special audit of PIA’s accounts by June 30th, a requirement before its privatisation.

  • Pakistan to retain stake in PIA amid privatisation efforts

    Pakistan to retain stake in PIA amid privatisation efforts

    Pakistan intends to retain a stake in the state-owned Pakistan International Airlines (PIA) to capitalise on its potential value increase following the airline’s sale, according to a report by Bloomberg.

    Usman Bajwa, Secretary at the Privatisation Commission, announced during a news briefing that the nation aims to finalise the bidding process within the next ten days. The privatisation agency plans to offer a minimum of 51 per cent of PIA’s shares to six pre-selected groups.

    PIA has struggled financially, failing to generate a profit for nearly two decades. This sale marks a significant step in the government’s broader strategy to implement economic reforms, which are part of the conditions set by the International Monetary Fund (IMF) for a bailout. Previous attempts to privatise the airline have been unsuccessful.

    In addition to PIA, Pakistan plans to divest from ten other state-owned entities, including power distribution companies, within the next year, as per the privatisation ministry.

    The government is also soliciting initial bids for the Roosevelt Hotel in New York, considering options such as an outright sale, joint venture, or long-term lease.

    Last month, Pakistan shortlisted six groups to bid for PIA, featuring prominent figures and conglomerates. These include tycoon Arif Habib and a consortium led by the Yunus Brothers Group. Pak Ethanol Pvt.’s consortium comprises Switzerland’s Swiss Aviation Group AG, Austria’s Airport Competence GmbH, and Australia’s Pearl Asset Management.

    This privatisation drive reflects Pakistan’s commitment to economic reform and stabilisation, aiming to attract investment and improve the financial health of its state-owned enterprises.