ISLAMABAD: Pakistan’s Privatization Ministry said on Friday the national airline’s privatization has stalled after months of efforts, as the sole bid came in “too low” compared to government expectations, which the airline employees’ union and an economist called a “major embarrassment” for the authorities.
The national flag carrier received a Rs10 billion ($36 million) bid from real estate development company Blue World City a day earlier for 60 percent Pakistan International Airlines (PIA) stakes during a televised auction, far below the minimum price of Rs85 billion ($305 million) set by the government.
The country plans to sell more than 51 percent of its stake in the loss-making national air carrier as part of economic reforms Islamabad agreed to with the International Monetary Fund (IMF) for a critical 37-month, $7 billion bailout deal approved in September.
Pakistan’s government pre-qualified six groups in June, but only the real estate development company met a Tuesday deadline to submit final documents to participate in the auction.
“The airline’s sale process has stalled for now, but the Privatization Commission Board will review the bid offer in its next meeting,” Dr. Ahsan Ishaq, a spokesperson for the Privatization Ministry, told Arab News, without specifying a date for the meeting.
“Finally, the matter will go to the federal cabinet for approval, but obviously, the bid is too low compared to government expectations,” he added. “Therefore, it may not receive formal assent.”
The state-owned Pakistan Television broadcast the bidding process live, with Blue World City as the sole bidder.
The $36 million bid was read out in front of government officials and financial advisers, which the PIA employees’ union later described as a “major embarrassment” for the authorities.
“The government should add at least twenty planes to the PIA fleet on dry lease to make it a profitable airline instead of selling it for peanuts,” said Hidayatullah, president of the PIA employees’ union, who goes by a single name, while speaking to Arab News.
“We will not allow the privatization of this national asset, and we will launch a nationwide protest if the government goes ahead with this bid,” he said.
During the bidding event, Blue World City Chairman Saad Nazir refused to match the government’s minimum price of Rs85 billion, saying, as per his company’s assessment, the offer made was “the best decision.”
The government’s initial plan was to finalize the PIA sale on the country’s Independence Day, August 14, but the plan was delayed following requests from bidders who were awaiting the airline’s latest audited accounts, aircraft lease agreements and clarity on flights to Europe, which are currently banned.
The auction was postponed twice, first to September and then to October, but neither event materialized.
Dr. Vaqar Ahmed, a senior economist, said the government had failed to “hunt potential investors” for PIA ahead of the formal auction and did not organize roadshows to market the airline’s assets to attract major investors.
“Major foreign investors have already expressed serious reservations about difficulties in repatriating their profits from investments in various sectors,” he told Arab News. “Therefore, they were apprehensive about joining the bidding process.”
“The government should have initiated measures to address the concerns of major investors and businesses ahead of formally launching the auction process for PIA to attract a fair price for the airline,” he continued.
Official data available to Arab News shows that there are 88 commercially operated state-owned enterprises in Pakistan, with collective losses amounting to Rs730.258 billion ($2.61 billion) in the fiscal year 2022.
In its five-year privatization plan ending in 2029, the government approved 24 state-owned enterprises for sale, including PIA.
With a fleet of 34 aircraft comprising 17 Airbus A320s, 12 Boeing B777s, and 5 ATRs, PIA loses market share to Middle Eastern carriers, who dominate with 60 percent due to the absence of direct flights to key destinations.
The carrier has air service pacts with 87 countries and landing slots at significant destinations such as London Heathrow.
The reorganization plan will separate aviation-related operations from non-core components, thereby freeing the operating subsidiary from a large portion of legacy debt.

ISLAMABAD: Pakistani information minister Attaullah Tarar said on Friday Islamabad was working closely with Riyadh to make “operational” $2.8 billion in investment deals signed last month, saying Prime Minister Shehbaz Sharif had discussed the investments with Saudi Crown Prince Mohammed bin Salman during a recent visit to Riyadh.
Saudi Minister for Investment Khalid bin Abdulaziz Al-Falih said on Wednesday 27 agreements and memorandums of understanding (MoUs) worth $2.2 billion that had been signed between Saudi and Pakistani businesses in October had been enhanced to $2.8 billion. The business-to-business deals, now enhanced to 34, were signed on Oct. 10 during Al-Falih’s visit to Islamabad with a delegation of top investors and entrepreneurs from the Kingdom. 
“The [Pakistani] prime minister met the Saudi crown prince in a great atmosphere,” Tarar told reporters. “And so more agreements have been signed and we discussed taking them forward, making them operational, work has already started on five [agreements].
“Talks on that also happened and we reaffirmed the commitment that we will enhance Saudi-Pakistan ties and expand investment and trade.”
Tarar said the $600 million additional investment from Riyadh was a “big step” and involved sectors such as energy, minerals, trade, livestock, human resource and IT.
Speaking about Sharif’s visit to Doha after Riyadh, Tarar said Qatar would invest $3 billion in Pakistan:
“In Qatar, [Prime Minister Shehbaz Sharif] has met a business delegation as well as the Qatari PM and emir of Qatar. Agreement has been made in expanding economic cooperation and relations in the field of culture. Discussions happened to further investment and trade also. I think this $3 billion investment will really boost Pakistan’s economy.”

Sharif’s visits to Doha and Riyadh took place at a time when Islamabad is seeking to strengthen trade and investment ties with friendly nations. Riyadh in particular has promised a $5 billion investment package that cash-strapped Pakistan desperately needs to shore up its dwindling foreign reserves and fight a chronic balance of payment crisis.
In 2022, the Qatar Investment Authority said it aimed to invest $3 billion in Pakistan. Doha has also shown interest in airport management partnership and the Roosevelt Hotel in New York’s Manhattan owned by the Pakistan International Airlines. 
During a visit to Qatar in 2022, Sharif, then in his first term as PM, invited QIA, Qatar’s $450 billion sovereign wealth fund, to invest in Pakistan’s energy and aviation sectors. He had previously mentioned renewable energy, food security, industrial and infrastructure development, tourism and hospitality, among sectors of interest.