PIA Sale to Be Completed By December 2025: Privatization Advisor

The Privatization Commission has presented a list of state-owned enterprises (SOEs) earmarked for privatization to a Senate committee. Advisor on Privatization Muhammad Ali briefed the committee that the privatization of Pakistan International Airlines (PIA) is expected to be completed by approximately December. The Expression of Interest for PIA will be issued this month, and bidders will be allowed to conduct due diligence of the assets in July. The due diligence phase is expected to continue until September. The advisor also mentioned that companies that participated in the previous attempt at privatization will also be included in the second round. Meanwhile, the commission informed the committee that the federal government has a total of 84 SOEs, out of which a list of 24 entities has been prepared for privatization. Pertinently, sources told ProPakistani that the privatization of Pakistan International Airlines (PIA) is unlikely to meet the July deadline given to the International Monetary Fund (IMF). According to the commission, the privatization of 10 entities included in the first phase of the list is expected to be completed within one year. These entities include Pakistan International Airlines (PIA), State Life Insurance Corporation, Utility Stores Corporation, First Women Bank Limited, and House Building Finance Company. Power distribution companies IESCO, FESCO, and GEPCO are also part of the privatization list. The Pakistan Mineral Development Corporation (PMDC) is not included in the current privatization list, although the Petroleum Division has recommended its privatization. The Advisor on Privatization stated that the Cabinet Committee on SOEs formulates the list of entities for privatization and is currently overseeing 44 entities. During the committee meeting, Advisor Muhammad Ali noted that PIA, which was once profitable, has been incurring losses for a long time. He emphasized that the future prospects of the entities are taken into consideration during the privatization process. The committee was briefed that the Cabinet Committee on Privatization has approved the privatization of PMDC, and the privatization processes for Heavy Electrical Complex and Services International Hotel have been completed. Regarding other entities, the Privatization Commission stated that the privatization phase of the Roosevelt Hotel is currently incomplete, while House Building Finance Company and Zarai Taraqiati Bank Limited (ZTBL) are in the privatization phase, with the financial advisor process initiated for ZTBL. The commission mentioned that a decision on the recommendations for ZTBL’s financial advisor will be made, and the government intends to give ZTBL a commercial identity, with the federal cabinet ultimately deciding on its operations. Members of the committee expressed concerns about the potential privatization of ZTBL, stating that the bank serves as a crucial support for farmers by providing loans and holds a mother-like status for them. They argued that its privatization would be an injustice to the farming community. Advisor Muhammad Ali acknowledged that ZTBL has incurred losses amounting to billions and its balance sheet is in deficit. He assured the committee that a thorough analysis of the bank would be conducted, and its portfolio would be reviewed after privatization. He clarified that ZTBL’s privatization is in the initial stages and emphasized the need to consider various factors, including the bank’s inability to recover loans. He also pointed out that commercial and Islamic banking sectors offer similar services. The Chairman of the committee suggested writing a letter to the Prime Minister regarding ZTBL, and Rana Mahmood ul Hassan proposed inviting representative organizations of farmers for further consultation. The Advisor on Privatization mentioned that the central bank can provide policy related to the banking sector and can instruct commercial banks on the percentage of lending to the agriculture sector. The Standing Committee on Privatization decided to hold further consultations regarding ZTBL, and the ZTBL administration and farmers’ organizations will be summoned in the next meeting. The Privatization Commission has also requested further details regarding the bank.