PIA Privatization: Bidders Refuse to Pay FBR Taxes and CAA Dues

The government’s push to privatize Pakistan International Airlines (PIA) has encountered new hurdles, as prospective buyers have refused to take on the airline’s outstanding dues to the Federal Board of Revenue (FBR) and the Civil Aviation Authority (CAA). During a meeting of the Senate Standing Committee on Privatization, chaired by Senator Afnan Ullah Khan, Secretary Privatization Commission Usman Bajwa revealed that PIA owes Rs. 28 billion to the FBR and Rs. 7 billion to the CAA. Bidders have demanded changes to the transaction framework, insisting they will not assume responsibility for these liabilities. To address the issue, the Privatization Commission said proceeds from the sale of PIA’s Roosevelt Hotel in New York and a hotel property in Paris, expected to fetch over Rs. 500 billion, will be used to clear the airline’s debts. The Roosevelt Hotel’s 17-storey building is set to be demolished, pending U.S. approval, with a new 1.3 to 1.4 million square foot structure planned for the site. A new financial advisor for the hotel’s lease-out is expected to be appointed next month.