ISLAMABAD: A fresh advertisement seeking privatisation bids has been published by the national carrier Pakistan International Airlines (PIA). Parties interested in PIA purchase can submit their bids by June 3.
The Ministry of Privatization and the Privatization Commission have confirmed the issuance of advertisement to Hum Investigation Team (HIT). For improved privatization process, services of foreign company E&Y Limited have also been obtained by the PIA.
PIA privatisation plan revived after airline posts rare profit
The company has been paid $7 million in the first phase of privatisation, senior PIA officials told HUM News. Parties expressing interest will be called in the second week of June for the final bid for privatisation of the national airline.
The advertisement also details that no tax will be levied on the purchase of new aircraft.
The officials also said that all major obstacles in PIA’s privatisation have been removed. The International Monetary Fund (IMF) has accepted the demand for 18 per cent general sales tax exemption on the purchase of new aircraft.
Senior officials discussed the demands of the bidders with the IMF and they accepted both the demands of the bidders. The PIA buyer will now be immune from any litigation by the airline, and the successful bidder will no longer be required to pay sales tax on the purchase of new aircraft.
IMF agrees to remove 18pc GST on new aircraft to facilitate PIA privatisation
Previous bidders had raised objections to the abolition of the general sales tax on the purchase of aircraft and PIA’s liabilities.
The terms of the privatisation bid also show that 49 per cent of the airline’s shares will remain with the PIA Holding Company. All liabilities of PIA have been transferred to its new holding company already.
PREVIOUS FAILED ATTEMPT
In a ceremony held on October 31 last year, for the privatization of PIA, only the Blue World City consortium placed a bid of Rs10 billion. Even this was against the minimum price set by the government at Rs85.3 billion.
PIA’s privatisation: sole bidder falls short of reserve price in aution
PIA had high liabilities on its books and low asset value. The bidders expressed their disinterest in the privatisation of PIA due to additional liabilities of Rs45 billion.