Islamabad: In an update to the privatization process of Pakistan International Airlines (PIA), the Pakistani government has extended the due diligence period by two months, with a new completion deadline set for October 1, 2024. This extension aims to provide prospective buyers with adequate time to assess the airline’s value and operations.
According to Zameen.Com, the decision to extend the due diligence phase was influenced by requests from four out of the six bidders, seeking additional time ranging from 60 days to six months. The government’s move reflects a strategic approach to ensuring a thorough evaluation process, which includes site visits and pre-bid meetings, set to be conducted transparently via live streaming. This extension is also aligned with labor-sensitive policies, mandating the retention of PIA’s current workforce by the future owner for up to three years post-acquisition.
The financial strain on PIA has been significant, with losses amounting to PKR 599 billion (approximately USD 3.34 billion) since February 2015, including a substantial PKR 75-80 billion in the last year alone. These figures underscore the urgency behind the privatization efforts, as expressed by members of the National Assembly’s Standing Committee on Privatization. Concerns about the airline’s performance and the reasons for privatization were discussed, with suggestions for a comprehensive performance audit to ensure that inefficiency is not the sole factor driving the privatization.
The broader privatization agenda also includes the Roosevelt Hotel in New York and the House Building Finance Company Limited (HBFCL), with significant developments reported in both cases. The government has engaged Jones Lang Lasalle Americas Inc. (JLL) to advise on the Roosevelt Hotel, exploring options from leases to sales, and the potential sale of HBFCL to Pakistan Mortgage Refinance Company (PMRC) is nearing completion despite earlier concerns over privatizing a profitable entity.
This period of strategic restructuring and privatization in Pakistan’s public sector marks a critical phase in the country’s economic management, aiming to alleviate financial burdens and optimize national assets.