ISLAMABAD: Former finance minister Miftah Ismail criticized the Khyber Pakhtunkhwa and Punjab governments for their interest in acquiring the struggling Pakistan International Airlines (PIA). He emphasized that provincial governments should prioritize public service over managing airlines.
“No government in the world operates airlines,” Miftah stated during a discussion on Geo News’ program Naya Pakistan.
Failed Privatization Attempt
The federal government’s latest attempt to privatize PIA fell short when the only bidder, Blue World City, offered a mere Rs10 billion for a 60% stake. This bid was significantly below the minimum asking price of Rs85 billion, and the bidder refused further negotiations. This failure marks Pakistan’s second attempt to divest the national flag carrier in a decade. A previous effort to sell PIA in 2015 also ended without success.
Provincial Governments Step In
In the wake of the bidding failure, the Khyber Pakhtunkhwa government expressed a strong interest in acquiring PIA. They reached out to Privatisation Minister Abdul Aleem Khan, stating their readiness to place a bid exceeding the current offer of Rs10 billion. The KP’s Board of Investment and Trade (BOIT) communicated this intent in a letter.
Following the KP government’s lead, the Punjab government, led by Maryam Nawaz, also showed interest in acquiring the airline. Former Prime Minister Nawaz Sharif revealed that Maryam suggested rebranding PIA as “Air Punjab” if they were to acquire it.
Provincial Responsibilities Highlighted
Miftah Ismail commented on the provinces’ ambitions regarding PIA, stating that he was unaware of any province operating an airline. He asserted, “A province’s responsibility is to provide education, health, and convenience to the people.” He expressed disappointment that provinces do not contribute tax revenue but instead seek financial assistance from the federal government.
Concerns Over Bidding Process
Regarding the failed privatization of PIA, Miftah Ismail noted that the process came with “such pre-requisitions” that discouraged potential buyers. He revealed that four interested groups wanted to participate in the bidding process for the national carrier, indicating there is some appetite for investment despite the challenges.
Economic Pressure from the IMF
The collapse of PIA’s privatization attempt comes amid increasing pressure on Pakistan from the International Monetary Fund (IMF) to implement fiscal reforms. Under an IMF loan program, Pakistan committed to divesting loss-making state-owned enterprises, including PIA, as part of its strategy to stabilize the economy.
Despite IMF expectations for the sale of PIA to be completed by September, the government delayed the auction deadline multiple times. Initially set for August 14, it was pushed to October 1, then to October 31. These delays reflect a lack of investor interest and highlight the challenges facing the privatization process.
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