ISLAMABAD: The Pakistan government has delayed the auction of national carrier Pakistan International Airlines for the third time with no new date announced as potential bidders seek more time and information to assess the airline, a spokesman for the privatization ministry said on Friday.
The disposal of the flag carrier is a step that past elected governments have steered away from as it is likely to be highly unpopular, but progress on privatization is a precondition for cash-strapped Pakistan for an IMF bailout agreement approved this week.
The government announced in June it had selected six companies qualified to bid for PIA out of a pool of eight after receiving expressions of interest. The initial plan was to finalize the deal to sell PIA on the country’s Independence Day, Aug. 14, but the plan was delayed following requests from bidders who were waiting for the airline’s latest audited accounts, aircraft lease agreements and clarity on flights to Europe, which are currently banned. This was followed by September and October dates for the auction, but those have also not materialized.
Pakistan plans to sell more than 51 percent of its stake in the loss-making airline as part of the economic reforms suggested by the IMF which approved a long-awaited 37-month $7 billion bailout deal on Wednesday that will require “sound policies and reforms” to strengthen macroeconomic stability and address structural challenges alongside “continued strong financial support from Pakistan’s development and bilateral partners.”
“Bidding is postponed but no new date is given officially,” Dr. Ahsan Ishaq, a spokesperson for privatization ministry, told Arab News on Friday.
He said the ministry had received “no official reason” from the bidders to delay the process but confirmed that they had been requesting more time and information to assess the carrier.
In August, the country’s central bank refused to grant a waiver or exemption to prospective buyers regarding PIA’s commercial bank loans of Rs268 billion ($971.1 million) and other financial guarantees in dollar terms, a development viewed as a setback to the privatization bid.
Dr. Ishaq said his ministry was in touch with the central bank to resolve the issue regarding all outstanding commercial loans of the national carrier before its final bid.
According to the ministry, the pre-qualified bidders for PIA include Air Blue, Arif Habib Corporation, Blue World City, Fly Jinnah, Pak Ethanol (Pvt) Consortium and YB Holdings Consortium.
Official data available with Arab News shows there are 88 commercially operated state-owned enterprises in Pakistan, with collective losses of up to Rs730.258 billion ($2.61 billion) in the fiscal year 2022 (FY22).
In its five-year privatization plan ending in 2029, the government has approved 24 state-owned enterprises for sale, including PIA.
The top ten loss-making Pakistani entities, including PIA with Rs97.5 billion, the National Highways Authority at Rs168.5 billion and the Peshawar Electric Supply Company Limited with Rs102.2 billion, accounted for cumulative losses of Rs650.197 billion ($2.33 billion) in FY22, according to official data.
In contrast, the remaining enterprises reported combined losses of Rs80 billion ($286 million) during the same fiscal year.
Dr. Ishaq said PIA’s cumulative losses alone had surpassed Rs800 billion ($2.86 billion), with the total asset valuation of the airline standing at approximately Rs160 billion ($572 million).
Haroon Sharif, a former member of the Cabinet Committee on Privatization and a senior economist, said the government should have started the privatization process with “simpler transactions” to improve the confidence of investors instead of trying to sell complicated organizations like PIA.
“It is difficult to smoothly privatize PIA as its accounts, assets and financial records are not as transparent as required by the bidders,” he told Arab News, suggesting that the government bifurcate the PIA into four or five different sections and privatize them in parts.
“The potential bidders will definitely want to see clear and transparent audits, assets and liabilities of PIA before going ahead for the final auction, so that’s why this may take some time,” Sharif said. “The government should also refrain from privatizing the national carrier in haste, otherwise it will backfire.”
With a fleet of 34 aircraft comprising 17 Airbus A320s, 12 Boeing B777s and 5 ATRs, the airline loses traffic to Middle Eastern carriers, who have a market share of 60 percent, because of an absence of direct flights to destinations.
The carrier has air service pacts with 87 countries, and landing slots at key destinations such as London Heathrow.
The re-organization plan of the business will separate the aviation-related aspects from non-core components, so freeing the operating subsidiary of a large portion of legacy debt.
Pakistan delays PIA auction for third time as bidders seek more time
https://arab.news/pae5s
Pakistan delays PIA auction for third time as bidders seek more time
- No new date given for auction with the bidding process initially scheduled to be completed on Oct. 1
- Privatization commission spokesman says PIA’s cumulative losses have surpassed $2.86 billion
Pakistan delegation walks out as Israeli PM takes podium to address UNGA
- Over 41,000 Palestinians have been killed since Israel launched a war on Gaza in October last year
- Netanyahu’s speech on Friday dampened hopes for a ceasefire that could head off an all-out regional war
ISLAMABAD: The Pakistani delegation to the UN General Assembly staged a walkout in protest as Israeli Prime Minister Benjamin Netanyahu took the podium, vowing to continue Israel’s attacks on Iranian-backed fighters in Lebanon in a closely watched United Nations speech on Friday.
Pakistan does not recognize nor have diplomatic relations with Israel and calls for an independent Palestinian state based on “internationally agreed parameters” and the pre-1967 borders with Al-Quds Al-Sharif as its capital.
Since the beginning of Israel’s war on Gaza in Oct 2023, Pakistan has repeatedly raised the issue at the United Nations, the Organization of Islamic Cooperation and other multilateral platforms and demanded international powers and bodies stop Israeli military actions in Gaza. The South Asian country has also dispatched several aid consignments for Palestine.
Video footage widely shared on social media showed the Pakistani delegation walking out of the UNGA hall.
“Pakistani delegation led by Prime Minister Shehbaz Sharif walked out as Israeli PM Benjamin Netanyahi took the podium after PM Shehbaz’s speech,” the foreign office said, as it shared a video of the walkout with reporters.
Netanyahu’s speech on Friday dampened hopes for a ceasefire that could head off an all-out regional war.
“As long as Hezbollah chooses the path of war, Israel has no choice, and Israel has every right to remove this threat and return our citizens to their homes safely,” Netanyahu told the UNGA, referring to escalating violence between the Lebanese Hezbollah and Israel.
“Israel has been tolerating this intolerable situation for nearly a year. Well, I’ve come here today to say enough is enough.”
Several delegations including Pakistan’s walked out as Netanyahu approached the lectern while supporters in the gallery cheered.
In southern Lebanon, Israel continued to strike Hezbollah targets while diplomats at the UN voiced fears the attacks could flare into a wider war that draws in Israel’s arch-foe, Iran.
In his speech, Netanyahu sought to pin blame for the conflict on Iran, whose delegation was absent for the speech. He said Israel was defending itself against Tehran on seven fronts, including against Hamas in Gaza, Hezbollah in Lebanon and Houthis in Yemen.
“There is no place in Iran that the long arm of Israel cannot reach. And that’s true of the entire Middle East. Far from being lambs led to the slaughter, Israel soldiers have fought back with incredible courage,” Netanyahu said.
“I have another message for this assembly and for the world outside this hall: We are winning,” he said. “We’ll continue degrading Hezbollah until all our objectives are made.”
During the speech, Netanyahu cited the presence in the hall of families of hostages seized by Hamas on Oct. 7. The war began when Hamas gunmen stormed Israeli communities, killing around 1,200 people and taking about 250 hostages back to Gaza, according to Israeli tallies.
Since then, Israel’s military has leveled swaths of the besieged Palestinian enclave, driving nearly all of its 2.3 million people from their homes, giving rise to deadly hunger and disease and killing more than 41,000 people, according to Palestinian health authorities.
With inputs from Reuters
Pakistan removes floor price for rice exports
- Minimum export price for rice last set in November to be removed “effective immediately,” commerce ministry says
- Earlier this month, India removed a floor price for basmati rice exports to help farmers struggling with debt
ISLAMABAD: Pakistan removed a floor price for rice exports on Friday, the country’s commerce ministry said, following a similar move by neighboring India.
The Ministry of Commerce said in a written notification that the minimum export price for rice which was last set in November would be removed “effective immediately.”
Earlier this month, India removed a floor price for basmati rice exports to help farmers struggling with debt and higher costs boost overseas sales of the premium grade just weeks ahead of the arrival of the new-season crop.
India and Pakistan, the only growers of basmati, both try to promote the premium grade of rice in a manner similar to French Champagne or Darjeeling tea.
Pakistan receives $1.02 billion first tranche from new IMF bailout
- IMF board on Wednesday approved a long-awaited $7 billion bailout deal
- First tranche to be reflected in SBP liquid reserves to be released on Oct. 3
ISLAMABAD: Pakistan’s central bank said on Friday it had received $1.0269 billion from the International Monetary Fund as the first tranche of a $7 billion bailout to stabilize the economy, two days after the global lender’s board approved the package.
The IMF’s board on Wednesday approved a long-awaited 37-month $7 billion bailout deal that will require “sound policies and reforms” to strengthen macroeconomic stability and address structural challenges alongside “continued strong financial support from Pakistan’s development and bilateral partners.”
“Following the approval of the IMF Executive Board of 37-month Extended Fund Facility amounting to $7 billion, SBP has received the first tranche of SDR 760 million (equivalent to USD 1026.9 million) from the IMF today [Friday],” the central bank said.
“These inflows will be reflected in SBP liquid reserves to be released on Thursday 03 Oct 2024.”
Pakistan has been struggling with boom-and-bust economic cycles for decades, leading to 22 IMF bailouts since 1958. Currently the country is the IMF’s fifth-largest debtor, owing the Fund $6.28 billion as of July 11, according to the lender’s data.
The latest economic crisis has been the most prolonged and has seen Pakistan facing its highest-ever inflation, pushing the country to the brink of a sovereign default last summer before a stop-gap last-minute IMF bailout.
Inflation has since eased and credit ratings agency Moody’s has upgraded Pakistan’s local and foreign currency issuer and senior unsecured debt ratings to ‘Caa2’ from ‘Caa3’, citing improving macroeconomic conditions and moderately better government liquidity and external positions.
With inputs from Reuters
Cricket umpire Aleem Dar to quit next year after Pakistan domestic season
- The 56-year-old Dar is among four Pakistani umpires on the ICC international panel
- Dar says its the right time to step down, give opportunities to other emerging Pakistani umpires
ISLAMABAD: Three-time world cricket umpire of the year Aleem Dar will step down in 2025 after the Pakistan domestic season.
The 56-year-old Dar served on the ICC elite panel of umpires from 2003-23. He is on the Pakistan elite panel and is among four Pakistani umpires on the ICC international panel, making him eligible to officiate in one-day internationals and Twenty20s.
“All great journeys must eventually come to an end, and the time has come for me to focus fully on my social and charity work,” Dar said on Friday. “My hospital project and other initiatives are very close to my heart and require my full devotion and attention.”
Dar played 17 first-class matches and 18 List A games from 1986-98 before he made his first-class umpiring debut in Pakistan’s premier domestic competition, the Quaid-e-Azam Trophy, in 1999.
“Umpiring has been my life for nearly 25 years and I have cherished the privilege of officiating some of the most iconic matches involving the greatest players of this generation,” Dar said. “Throughout my career, I’ve strived to uphold the highest standards of sportsmanship, and it has been an honor to work alongside some of the finest match officials in the world.”
Dar said it was the right time to step down and give opportunities to other emerging umpires from Pakistan.
“I will remain committed to mentoring and supporting the next generation of match officials and will always be available to offer guidance to those pursuing a career in this noble profession,” he said.
Dar officiated in 145 test matches, 231 ODIs, 72 T20s, and five T20 World Cups.
Pakistan invites investment from American banks as it seeks sustainable external financing
- On Friday, Sharif met officials of top American banks including JP Morgan, Natixis Corporate & Investment Bank, Goldman Sachs
- IMF bailout loan is contingent on “continued strong financial support from Pakistan’s development and bilateral partners”
ISLAMABAD: Prime Minister Shehbaz Sharif on Friday invited American banks to invest in Pakistan’s infrastructure, energy, technology and agriculture sectors as the South Asian country seeks sustainable forms of external financing like direct investment.
On Friday, the IMF said Pakistan had received “significant financing assurances” from China, Saudi Arabia and the United Arab Emirates linked to a new International Monetary Fund program that go beyond a deal to roll over $12 billion in bilateral loans owed to them by Islamabad.
The IMF’s Executive Board on Wednesday approved the new $7 billion, 37-month loan agreement for Pakistan that will require “sound policies and reforms” to strengthen macroeconomic stability and address structural challenges alongside “continued strong financial support from Pakistan’s development and bilateral partners.”
The approval releases an immediate $1 billion disbursement to Islamabad.
On Friday, Sharif met a delegation of officials from top American banks in New York, including JP Morgan, Natixis Corporate & Investment Bank, Sumitomo Mitsui Banking Corporation, Goldman Sachs, Citizens Bank, Lazard and Audax Private Equity Partnering.
“The Prime Minister assured the delegation of the government’s commitment to maintaining a stable macroeconomic environment to facilitate foreign investors,” state broadcaster Radio Pakistan said in a report after the meeting.
“The Prime Minister informed the delegation about the key initiatives taken by the Government to stabilize the economy and attract foreign investment to Pakistan, including broadening the tax base, enhancing the ease of doing business, and ongoing reforms in the state-owned enterprises.”
These steps had resulted in improved economic indicators and the up-gradation of Pakistan’s credit rating by international rating agencies, including, Fitch and Moodys.
“He also briefed the delegation on the establishment of a Sustainable Finance Framework, which will allow the government to carry out a green and sustainability bond issuance in the international capital markets,” Radio Pakistan reported.
Islamabad had been working on implementing the IMF’s conditions, which Sharif had previously called “strict” to secure the 37-month loan program agreed in July.
One condition was to secure additional external financing, which the country was struggling to do.
The IMF said in a statement on Wednesday that Pakistan had taken key steps to restore economic stability with consistent policy implementation under the 2023-24 standby arrangement.
It added that growth had rebounded to 2.4 percent and inflation has receded significantly, falling to single digits, amid appropriately tight fiscal and monetary policies.
A contained current account and calm foreign exchange market conditions have allowed the rebuilding of reserve buffers, and the central bank of Pakistan has been able to cut the policy rate by a total of 450 bps since June, the statement said.
Despite this progress, it said, Pakistan’s vulnerabilities and structural challenges remain formidable, adding that the tax base remains too narrow.
“Without a concerted adjustment and reform effort, Pakistan risks falling further behind its peers,” it warned.
With inputs from Reuters
