Govt to Issue EOI for PIA Privatization This Month

The federal government is set to issue an Expression of Interest (EOI) for Pakistan International Airlines (PIA) this month. Potential buyers will be offered a clean balance sheet and exempted from an 18 percent GST on aircraft purchases. This GST exemption will also extend to the entire aviation sector. Previously, investors withdrew due to Rs. 45 billion in negative equity and GST on aircraft purchases. The government has now agreed to absorb Rs. 26 billion in FBR taxes, Rs. 10 billion in Civil Aviation charges, and remaining pension liabilities on the condition of successful privatization. Ernst & Young is back as a financial advisor for the transaction. The government has also separated PIA’s non-core assets from the bidding process. The National Assembly Standing Committee on Privatization has been informed that the new buyer must add 15 to 20 aircraft to the PIA fleet. The committee chairman urged job security for PIA employees for at least five years.