Govt Rules Out Guarantees for PIA Buyers

The government plans to finalize the sale of Pakistan International Airlines (PIA) within this year and will not offer any guarantees to prospective buyers, Chairman Privatization Commission Muhammad Ali said on Monday. Speaking on Aaj TV’s News Insight with Amir Zia, Ali revealed that the International Monetary Fund (IMF) has approved the withdrawal of sales tax on the PIA transaction, but clarified that no other forms of investor assurances would be provided. “Governments change, and running airlines or businesses is not the mandate of provincial administrations,” he remarked. Addressing concerns about the slow pace of privatization, Ali explained that the process began with smaller, less complex transactions, such as the partial transfer of First Women Bank, before progressing to larger divestments, including PIA. On the topic of government-to-government (G2G) transactions, Ali argued that Pakistan’s own governance challenges, corruption, and economic vulnerabilities have limited its ability to negotiate favorable outcomes. He cautioned that major economic and geostrategic powers gain leverage in G2G deals, especially when the other side lacks bargaining strength. Ali advocated for competitive and transparent privatisation processes, stating these offer better protection for national interests. Ali also noted that the federal government has yet to resolve whether NEPRA or the government itself must approve the transfer of K-Electric’s shares, and acknowledged that the original sale of K-Electric suffered from inadequate due diligence. Looking ahead, the chairman stated that the government plans to privatize the Islamabad Electric Supply Company (IESCO), Faisalabad Electric Supply Company (FESCO), and Gujranwala Electric Power Company (GEPCO) next year. Authorities are also considering adopting the Turkish model, which allows private operators to run utilities on long-term concessional terms. Regarding airport infrastructure, Ali said Karachi and Lahore airports each require about $1 billion in capital for expansion, which the government expects private operators to mobilize once the airports are outsourced. On the gas sector, Ali stressed the need for structural reforms, stating, “For the sector to move forward, the Sui gas companies will have to be sold.”