PIA to resume privatization process

Islamabad: The second attempt to privatize the Pakistan International Airline (PIA) is all set with several returning bidders and stakeholders participating in the process.

The National Assembly’s Standing Committee on Privatization met under the chairmanship of Farooq Sattar and was informed that in the previous round, bidders had recommended waiving the 18 percent General Sales Tax (GST) imposed by the government on the induction of new aircraft and fleet expansion, believing that removing this tax would facilitate the acquisition of new aircraft.

The committee was told that PIA’s liabilities are Rs45 billion, of which Rs26 billion are tax liabilities of the Federal Bureau of Revenue (FBR). Rs10 billion is due to the Civil Aviation Authority (CAA) and the remaining amount consists of pension liabilities.

The International Monetary Fund (IMF) agreed that if PIA is privatized, 18 percent GST can be removed to encourage private sector investment in new aircraft.

The committee was further told that non-core assets are not part of PIA’s bidding process. The government is formulating a separate policy for these assets for which the consultant has suggested two to three options to the Cabinet Committee on Privatization.