KARACHI: Bids for privatisation of Pakistan International Airlines (PIA) have been sought from the buyers by May 3, ARY News reported.
According to privatisation ministry officials, the losses and loans of the PIA have been shifted to the withholding company before its privatisation.
The government of Pakistan only wants to privatise the aviation department of the PIA and is interested in selling 51pc shares of the national flag carrier, while 49pc shares’ ownership will remain with the government.
The administrative control of PIA will also remain with the company buying the 51pc shares, the officials said.
Sources privy to the matter said that the companies from the three countries have approached the Pakistan government to negotiate a deal for the Pakistan International Airlines.
https://www.google.com/amp/s/arynews.tv ... may-3/amp/
Bids Invited for PIA Privatisation
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Karachi Aviator
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Amaad Lone
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Re: Bids invited for PIA privatisation
Should the government set a reserve price???
Like the minimum price the airline should fetch.
Like the minimum price the airline should fetch.
P.I.A
God's International Airline
God's International Airline
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Karachi Aviator
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Re: Bids invited for PIA privatisation
PSO has also given its go ahead for PIA's privatisation:
https://www.google.com/amp/s/tribune.co ... -3%3famp=1
This is probably the closest we are to getting rid of PIA for once. Should be done and dusted by June unless something goes wrong.
https://www.google.com/amp/s/tribune.co ... -3%3famp=1
This is probably the closest we are to getting rid of PIA for once. Should be done and dusted by June unless something goes wrong.
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arshad.altaf
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Re: Bids invited for PIA privatisation
https://www.dawn.com/news/1825250/pakis ... ake-in-pia
Pakistan canvasses interest in purchase of stake in PIA
As part of reforms urged by the International Monetary Fund (IMF), the Privatisation Commission said on Tuesday that it was putting on the block a stake ranging from 51 per cent to 100pc of Pakistan International Airlines (PIA).
The disposal of the flag carrier is a step past elected governments have steered away from as likely to be highly unpopular, but progress on the privatisation will help pursue further funding talks with the IMF.
In a newspaper advertisement, the panel set a deadline of May 3 to receive statements of interest in PIA, which has piled up arrears of hundreds of billions of rupees, and it appointed EY Consulting as the financial adviser for the deal.
“The restructured PIA is being offered to potential investors in its ‘debt-lite’ new structure for a 51pc-plus stake,” the Privatisation Commission said in a website presentation.
The panel aimed to sign a share price deal by June 24, after completing all steps in the transaction, it added. “The restructured PIA provides an opportunity to invest in a a full-service airline.”
PIA’s 23pc share of Pakistan’s aviation market is the biggest, and the airline could grow further to exceed historic levels of 30pc, the panel said.
With a fleet of 34 aircraft comprising 17 Airbus A320s, 12 Boeing B777s and 5 ATRs, the airline loses traffic to Middle Eastern carriers, who have a market share of 60pc, because of an absence of direct flights to destinations.
The carrier has air service pacts with 87 countries, and landing slots at key destinations such as London Heathrow.
Restructuring
The re-organisation of the business will separate the aviation-related aspects from non-core components, so freeing the operating subsidiary of a large portion of legacy debt.
The restructuring will move out 603 billion rupees ($2.2 billion) of liabilities, leaving 203 billion ($730 million) on the balance sheet for the acquired business.
The presentation added that PIA broke even at earnings before interest, taxes, depreciation, amortisation, and restructuring or rent costs (EBITDAR) level in 2023, which the panel projected to continue in 2024.
Besides the losses and debt, however, global aviation regulators have questioned PIA’s governance and safety standards for some years.
In 2020, after a PIA plane crash in Karachi killed nearly 100, followed by a fake pilot license scandal, the European Union Aviation Safety Agency (EASA) banned the airline from its most lucrative routes in Europe and Britain.
The ban continues, costing the airline annual revenue of nearly Rs40 billion.
“PIA plans to restore its network, starting routes into the United Kingdom, Western Europe and the United States,” read the investment presentation.
Privatisation and the IMF
The offer of the stake, which carries management control, follows the agreement to implement fiscal discipline plans with the IMF, from which it secured a $3-billion bailout in June.
The government is now looking to start talks with the lender for a medium-term programme key to shoring up an economy bedevilled by high inflation, low reserves of foreign exchange and high external financing needs.
The IMF wants reforms to state-owned enterprises (SOEs) that more clearly define ownership and government roles.
Shares of the airline dropped 7.5pc in intraday trade to hit the lower limit, after soaring more than 403pc in the last six months.
Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.
Pakistan canvasses interest in purchase of stake in PIA
As part of reforms urged by the International Monetary Fund (IMF), the Privatisation Commission said on Tuesday that it was putting on the block a stake ranging from 51 per cent to 100pc of Pakistan International Airlines (PIA).
The disposal of the flag carrier is a step past elected governments have steered away from as likely to be highly unpopular, but progress on the privatisation will help pursue further funding talks with the IMF.
In a newspaper advertisement, the panel set a deadline of May 3 to receive statements of interest in PIA, which has piled up arrears of hundreds of billions of rupees, and it appointed EY Consulting as the financial adviser for the deal.
“The restructured PIA is being offered to potential investors in its ‘debt-lite’ new structure for a 51pc-plus stake,” the Privatisation Commission said in a website presentation.
The panel aimed to sign a share price deal by June 24, after completing all steps in the transaction, it added. “The restructured PIA provides an opportunity to invest in a a full-service airline.”
PIA’s 23pc share of Pakistan’s aviation market is the biggest, and the airline could grow further to exceed historic levels of 30pc, the panel said.
With a fleet of 34 aircraft comprising 17 Airbus A320s, 12 Boeing B777s and 5 ATRs, the airline loses traffic to Middle Eastern carriers, who have a market share of 60pc, because of an absence of direct flights to destinations.
The carrier has air service pacts with 87 countries, and landing slots at key destinations such as London Heathrow.
Restructuring
The re-organisation of the business will separate the aviation-related aspects from non-core components, so freeing the operating subsidiary of a large portion of legacy debt.
The restructuring will move out 603 billion rupees ($2.2 billion) of liabilities, leaving 203 billion ($730 million) on the balance sheet for the acquired business.
The presentation added that PIA broke even at earnings before interest, taxes, depreciation, amortisation, and restructuring or rent costs (EBITDAR) level in 2023, which the panel projected to continue in 2024.
Besides the losses and debt, however, global aviation regulators have questioned PIA’s governance and safety standards for some years.
In 2020, after a PIA plane crash in Karachi killed nearly 100, followed by a fake pilot license scandal, the European Union Aviation Safety Agency (EASA) banned the airline from its most lucrative routes in Europe and Britain.
The ban continues, costing the airline annual revenue of nearly Rs40 billion.
“PIA plans to restore its network, starting routes into the United Kingdom, Western Europe and the United States,” read the investment presentation.
Privatisation and the IMF
The offer of the stake, which carries management control, follows the agreement to implement fiscal discipline plans with the IMF, from which it secured a $3-billion bailout in June.
The government is now looking to start talks with the lender for a medium-term programme key to shoring up an economy bedevilled by high inflation, low reserves of foreign exchange and high external financing needs.
The IMF wants reforms to state-owned enterprises (SOEs) that more clearly define ownership and government roles.
Shares of the airline dropped 7.5pc in intraday trade to hit the lower limit, after soaring more than 403pc in the last six months.
Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.
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London Flyer
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Re: Bids invited for PIA privatisation
This seems like a strange way of doing this. Typically investment banks would originate potential investors in this type of transaction
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Abbas Ali
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Re: Bids invited for PIA privatisation
In April 2 newspaper:
Privatization Commission - Government of Pakistan
Invitation for Expression of Interest (EoI)
Divestment of Pakistan International Airlines Corporation Limited (PIACL)
For acquisition of 51%-100% share capital together with management control of Pakistan International Airlines Corporation Limited (PIACL)
ABOUT THE AIRLINE
Pakistan International Airlines Corporation Limited ("PIACL"), a public limited company, is a flag carrier airline of Pakistan. The Government of Pakistan ("GOP") directly owns approximately 96% of the issued capital of PIACL.
PIACL mainly provides aviation services with the support of its ancillary segments assisting its aviation making it a full service airline. The business segments include passengers, ground handling, flight training, cargo engineering and flight kitchen.
Out of the total 20.5 million passengers traveling during 2023, PIACL has successfully maintained a prominent market share and has been the market leader since 1955. The airline serves approximately 5 million passengers per annum through access to 34 distinct destinations and carrying out 260 flights per week. PIACL has access to 97 international routes with slots in some of the most attractive international destinations providing direct flight access to passengers travelling between Pakistan and the large diaspora target markets.
The demand in the under-served Pakistani aviation market is expected to continue to grow at a CAGR of around 5.5% from FY 2024 — FY 2028. Pakistan's population and its extensive global diasporas provide solid foundation for growth of the aviation business.
TRANSACTION OVERVIEW
With the objective to restructure and privatise PIACL, GOP has incorporated a company limited by shares called PIA Holding Company Limited ("PIA Holdco"). PIACL and PIA Holdco have filed a Scheme of Arrangement ("SOA") with the Securities and Exchange Commission of Pakistan ("SECP") under the Companies Act, 2017, for inter alia, the transfer of certain non-core assets and non-core liabilities as set out in the SOA (the "Non-Core Undertaking") to PIA Holdco.
Pursuant to the SOA, PIACL will continue to hold certain core assets and core liabilities as set out in the SOA (the "Core Undertaking"). The Core Undertaking includes assets, liabilities, employees pertaining to air transport operations and allied services (including ground handling, flight training, cargo engineering and flight kitchen), rights and obligations under various operational agreements executed by PIACL including the air services agreements, code sharing agreements, fuel supply agreements, passenger sales agency agreements and foreign loan agreements. Pursuant to the SOA, the existing shareholders of PIACL will become the shareholders of PIA Holdco (in same proportion they currently hold in PIACL) and PIACL will become a wholly-owned subsidiary of PIA Holdco, with a single class of ordinary shares. PIA Holdco will be listed on the stock exchange and PIACL will cease to be listed.
The SOA filed with SECP is available at following link https://privatisation.gov.pk/EOIPIACL, which includes the split balance sheet setting out the Core Undertaking and the Non-Core Undertaking. The scheme sanctioned may vary from the SOA filed with SECP.
PIACL may enter into operational arrangements such as office space and sales offices with PIA Holdco on an arms-length basis if considered necessary for smooth and continued operations, which shall be determined during the course of the privatisation process of PIACL.
GOP and PIA Holdco through the Privatisation Commission of Pakistan ("Privatisation Commission") invites Expressions of Interest ("E0I") from prospective investors to acquire between 51% and 100% share capital of PIACL (consisting as a single class of ordinary shares) together with management control (the "Equity Stake"). The terms and conditions for transfer and acquisition of the Equity Stake shall be set out in the bidding documents, which shall consummate after sanctioning of SOA and completion of the privatisation process.
EOI AND RSOQ SUBMISSION INSTRUCTIONS
Interested parties that are companies, firms, body corporate or other legal entities (and not individuals or the Federal or Provincial Government of Pakistan or any enterprise owned or controlled by the Federal or Provincial Government of Pakistan) should submit EOls in duplicate in hard copy to the Privatisation Commission,4th Floor, New Pak Secretariat Building, Kohsar Block, Constitution Avenue, Islamabad, Pakistan and also send the EOls electronically at dgamc@privatisation.gov.pk with a non-refundable processing fee of USD 5,000/- (United States Dollars Five Thousand only) or PKR 1,400,000/- (Pakistani Rupees One Million Four Hundred Thousand only). The non-refundable processing fee can be paid in the form of bank draft/pay order payable in favour of "Privatisation Commission, Government of Pakistan", which should be submitted with the hard copy of the EOI or through wire/electronic transfers (details for which will be available at the Privatisation Commission link below). The EOI must be available with the Privatisation Commission and the processing fee must be paid, on or before 16:00 Hours, May 3, 2024. EOls must contain the following information:
a. Name of company/group and its background information (including profile, place of incorporation, ownership details);
b. In case of local interested parties, copies of Computerised National Identity Cards (CNICs) of Directors and Shareholders holding or controlling (by itself or in concert) directly or indirectly 20% or more voting power;
c. In case of foreign interested parties, copies of passports of Directors and Shareholders holding or controlling (by itself or in concert) directly or indirectly 20% or more voting power;
d. Name, address, email address, telephone numbers of authorised representative;
and
e. Latest audited financial statements of the company/group.
Upon receiving EOIs, required information and processing fee, a Request for Statement of Qualification ("RSOQ") will be issued to interested parties compliant with the requirements set out in this invitation for EOls (the "RSOQ Recipients"). The RSOQ Recipients must submit the Statement of Qualification ("SOQ") latest by 16:00 Hours, May 3, 2024. Only RSOQ Recipients that are determined by the Privatisation Commission (in its sole and absolute discretion) as meeting the requirements set out in the RSOQ will be issued bid documents, allowing them to participate in the due diligence and bidding process, provided they comply with the requirements to be stated in the bid documents.
Early submission of EOI will allow parties maximum amount of time for preparation of SOQs.
SOQ Submission Deadline
16:00 Hours Pakistan Standard Time on May 3, 2024
OTHER INFORMATION
At any stage, the GOP/Privatisation Commission may, inter alia, introduce incentives, modify the transaction structure or impose additional conditions on the RSOQ Recipients or pre-qualified parties.
Information regarding the submission of EOI, SOA, Investment Teaser, PIACL, PIA Holdco, PIACL Financial Statements, are available on the following websites of Privatisation Commission and PIACL respectively:
i. https://privatisation.gov.pk/EOIPIACL
ii. https://www.piac.com.pk/corporate
GOP/Privatisation Commission and the Financial Advisor (or any member thereof) reserve the right not to respond to any request for preliminary or other information. GOP/ Privatisation Commission further reserve the right to accept or reject any or all EOIs. This Invitation for Expression of Interest is intended only to seek expression of interest from interested parties. The details of the transaction, information memorandum, conditions of sale, draft bidding documents and process would be advised to pre-qualified parties only at an appropriate time as part of the privatisation process. Any interested party who has an interest in this transaction shall not be entitled to object at a later stage if further information, incentives or concessions are provided in relation to the transaction to pre-qualified interested parties or the scheme sanctioned by SECP varies from the filed scheme. To facilitate the privatisation, the GOP/Privatisation Commission reserve the right to amend the transaction structure at a later stage in its absolute discretion. Documentation accompanying and comprising an EOI as provided by any interested party shall not be reclaimed or returned. This advertisement and the information provided or referenced herein (including the PIACL Financial Statements, Investment Teaser and the SOA filed with SECP) is not intended to be, and should not be construed as: (a) an offer or invitation to acquire any securities and/or assets of PIACL; and/or (b) a representation or warranty, express or implied, with respect to any statement made herein or in any document referenced herein.
The Privatisation Commission has appointed EY Consulting LLC, as the Financial Advisor to conduct this transaction. Other consortium members are Haidermota & Co and FreshFields Bruckhaus LLP (Legal Advisors), Knight Frank Valuation Services LLC (Valuator), Bauer Aviation Advisory (Technical), Nutshell Communications Private Limited (Public Relations).
CONTACT INFORMATION
Privatisation Commission
KAMRAN FAROOQ ANSARI - Director General (I&T, P&U) Phone: +92 51 9204593 Email: dgamc@privatisation.gov.pk
ABDUL BASIT ABBASI - Transaction Manager Phone: +92 51 9246049 Email: abdulbasit@privatisation.gov.pk
Financial Advisor EY Consulting LLC
HANI BISHARA Partner, Strategy and Transactions Phone: +97143 129290 Email: hani.bishara@parthenon.ey.com
ZEESHAN HUSSAIN Partner, Strategy and Transactions Phone: +92 21 111 113 937 Email: zeeshan.hussain@pk.ey.com
Abbas
Privatization Commission - Government of Pakistan
Invitation for Expression of Interest (EoI)
Divestment of Pakistan International Airlines Corporation Limited (PIACL)
For acquisition of 51%-100% share capital together with management control of Pakistan International Airlines Corporation Limited (PIACL)
ABOUT THE AIRLINE
Pakistan International Airlines Corporation Limited ("PIACL"), a public limited company, is a flag carrier airline of Pakistan. The Government of Pakistan ("GOP") directly owns approximately 96% of the issued capital of PIACL.
PIACL mainly provides aviation services with the support of its ancillary segments assisting its aviation making it a full service airline. The business segments include passengers, ground handling, flight training, cargo engineering and flight kitchen.
Out of the total 20.5 million passengers traveling during 2023, PIACL has successfully maintained a prominent market share and has been the market leader since 1955. The airline serves approximately 5 million passengers per annum through access to 34 distinct destinations and carrying out 260 flights per week. PIACL has access to 97 international routes with slots in some of the most attractive international destinations providing direct flight access to passengers travelling between Pakistan and the large diaspora target markets.
The demand in the under-served Pakistani aviation market is expected to continue to grow at a CAGR of around 5.5% from FY 2024 — FY 2028. Pakistan's population and its extensive global diasporas provide solid foundation for growth of the aviation business.
TRANSACTION OVERVIEW
With the objective to restructure and privatise PIACL, GOP has incorporated a company limited by shares called PIA Holding Company Limited ("PIA Holdco"). PIACL and PIA Holdco have filed a Scheme of Arrangement ("SOA") with the Securities and Exchange Commission of Pakistan ("SECP") under the Companies Act, 2017, for inter alia, the transfer of certain non-core assets and non-core liabilities as set out in the SOA (the "Non-Core Undertaking") to PIA Holdco.
Pursuant to the SOA, PIACL will continue to hold certain core assets and core liabilities as set out in the SOA (the "Core Undertaking"). The Core Undertaking includes assets, liabilities, employees pertaining to air transport operations and allied services (including ground handling, flight training, cargo engineering and flight kitchen), rights and obligations under various operational agreements executed by PIACL including the air services agreements, code sharing agreements, fuel supply agreements, passenger sales agency agreements and foreign loan agreements. Pursuant to the SOA, the existing shareholders of PIACL will become the shareholders of PIA Holdco (in same proportion they currently hold in PIACL) and PIACL will become a wholly-owned subsidiary of PIA Holdco, with a single class of ordinary shares. PIA Holdco will be listed on the stock exchange and PIACL will cease to be listed.
The SOA filed with SECP is available at following link https://privatisation.gov.pk/EOIPIACL, which includes the split balance sheet setting out the Core Undertaking and the Non-Core Undertaking. The scheme sanctioned may vary from the SOA filed with SECP.
PIACL may enter into operational arrangements such as office space and sales offices with PIA Holdco on an arms-length basis if considered necessary for smooth and continued operations, which shall be determined during the course of the privatisation process of PIACL.
GOP and PIA Holdco through the Privatisation Commission of Pakistan ("Privatisation Commission") invites Expressions of Interest ("E0I") from prospective investors to acquire between 51% and 100% share capital of PIACL (consisting as a single class of ordinary shares) together with management control (the "Equity Stake"). The terms and conditions for transfer and acquisition of the Equity Stake shall be set out in the bidding documents, which shall consummate after sanctioning of SOA and completion of the privatisation process.
EOI AND RSOQ SUBMISSION INSTRUCTIONS
Interested parties that are companies, firms, body corporate or other legal entities (and not individuals or the Federal or Provincial Government of Pakistan or any enterprise owned or controlled by the Federal or Provincial Government of Pakistan) should submit EOls in duplicate in hard copy to the Privatisation Commission,4th Floor, New Pak Secretariat Building, Kohsar Block, Constitution Avenue, Islamabad, Pakistan and also send the EOls electronically at dgamc@privatisation.gov.pk with a non-refundable processing fee of USD 5,000/- (United States Dollars Five Thousand only) or PKR 1,400,000/- (Pakistani Rupees One Million Four Hundred Thousand only). The non-refundable processing fee can be paid in the form of bank draft/pay order payable in favour of "Privatisation Commission, Government of Pakistan", which should be submitted with the hard copy of the EOI or through wire/electronic transfers (details for which will be available at the Privatisation Commission link below). The EOI must be available with the Privatisation Commission and the processing fee must be paid, on or before 16:00 Hours, May 3, 2024. EOls must contain the following information:
a. Name of company/group and its background information (including profile, place of incorporation, ownership details);
b. In case of local interested parties, copies of Computerised National Identity Cards (CNICs) of Directors and Shareholders holding or controlling (by itself or in concert) directly or indirectly 20% or more voting power;
c. In case of foreign interested parties, copies of passports of Directors and Shareholders holding or controlling (by itself or in concert) directly or indirectly 20% or more voting power;
d. Name, address, email address, telephone numbers of authorised representative;
and
e. Latest audited financial statements of the company/group.
Upon receiving EOIs, required information and processing fee, a Request for Statement of Qualification ("RSOQ") will be issued to interested parties compliant with the requirements set out in this invitation for EOls (the "RSOQ Recipients"). The RSOQ Recipients must submit the Statement of Qualification ("SOQ") latest by 16:00 Hours, May 3, 2024. Only RSOQ Recipients that are determined by the Privatisation Commission (in its sole and absolute discretion) as meeting the requirements set out in the RSOQ will be issued bid documents, allowing them to participate in the due diligence and bidding process, provided they comply with the requirements to be stated in the bid documents.
Early submission of EOI will allow parties maximum amount of time for preparation of SOQs.
SOQ Submission Deadline
16:00 Hours Pakistan Standard Time on May 3, 2024
OTHER INFORMATION
At any stage, the GOP/Privatisation Commission may, inter alia, introduce incentives, modify the transaction structure or impose additional conditions on the RSOQ Recipients or pre-qualified parties.
Information regarding the submission of EOI, SOA, Investment Teaser, PIACL, PIA Holdco, PIACL Financial Statements, are available on the following websites of Privatisation Commission and PIACL respectively:
i. https://privatisation.gov.pk/EOIPIACL
ii. https://www.piac.com.pk/corporate
GOP/Privatisation Commission and the Financial Advisor (or any member thereof) reserve the right not to respond to any request for preliminary or other information. GOP/ Privatisation Commission further reserve the right to accept or reject any or all EOIs. This Invitation for Expression of Interest is intended only to seek expression of interest from interested parties. The details of the transaction, information memorandum, conditions of sale, draft bidding documents and process would be advised to pre-qualified parties only at an appropriate time as part of the privatisation process. Any interested party who has an interest in this transaction shall not be entitled to object at a later stage if further information, incentives or concessions are provided in relation to the transaction to pre-qualified interested parties or the scheme sanctioned by SECP varies from the filed scheme. To facilitate the privatisation, the GOP/Privatisation Commission reserve the right to amend the transaction structure at a later stage in its absolute discretion. Documentation accompanying and comprising an EOI as provided by any interested party shall not be reclaimed or returned. This advertisement and the information provided or referenced herein (including the PIACL Financial Statements, Investment Teaser and the SOA filed with SECP) is not intended to be, and should not be construed as: (a) an offer or invitation to acquire any securities and/or assets of PIACL; and/or (b) a representation or warranty, express or implied, with respect to any statement made herein or in any document referenced herein.
The Privatisation Commission has appointed EY Consulting LLC, as the Financial Advisor to conduct this transaction. Other consortium members are Haidermota & Co and FreshFields Bruckhaus LLP (Legal Advisors), Knight Frank Valuation Services LLC (Valuator), Bauer Aviation Advisory (Technical), Nutshell Communications Private Limited (Public Relations).
CONTACT INFORMATION
Privatisation Commission
KAMRAN FAROOQ ANSARI - Director General (I&T, P&U) Phone: +92 51 9204593 Email: dgamc@privatisation.gov.pk
ABDUL BASIT ABBASI - Transaction Manager Phone: +92 51 9246049 Email: abdulbasit@privatisation.gov.pk
Financial Advisor EY Consulting LLC
HANI BISHARA Partner, Strategy and Transactions Phone: +97143 129290 Email: hani.bishara@parthenon.ey.com
ZEESHAN HUSSAIN Partner, Strategy and Transactions Phone: +92 21 111 113 937 Email: zeeshan.hussain@pk.ey.com
Abbas
Dil Dil Pakistan... Jaan Jaan Pakistan
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Hassan777
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Re: Bids invited for PIA privatisation
They really don't want to loose their perks and privilegesKarachi Aviator wrote: Tue Apr 02, 2024 11:20 am
The government of Pakistan only wants to privatise the aviation department of the PIA and is interested in selling 51pc shares of the national flag carrier, while 49pc shares’ ownership will remain with the government.
The administrative control of PIA will also remain with the company buying the 51pc shares, the officials said.
-
Abbas Ali
- Site Admin
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- Location: Pakistan
Re: Bids invited for PIA privatisation
PIA investment opportunity teaser.
https://privatisation.gov.pk/SiteImage/ ... 042024.pdf
Scheme of Arrangement (SOA) filed with Securities & Exchange Commission of Pakistan (SECP).
https://privatisation.gov.pk/SiteImage/ ... 0Final.pdf
Other documents:
https://privatisation.gov.pk/EOIPIACL
Abbas
https://privatisation.gov.pk/SiteImage/ ... 042024.pdf
Scheme of Arrangement (SOA) filed with Securities & Exchange Commission of Pakistan (SECP).
https://privatisation.gov.pk/SiteImage/ ... 0Final.pdf
Other documents:
https://privatisation.gov.pk/EOIPIACL
Abbas
Dil Dil Pakistan... Jaan Jaan Pakistan
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raza
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Re: Bids Invited for PIA Privatisation
Which aircraft is shown in the teaser?
777 with winglets ?
777 with winglets ?
Salam to All .....Raza
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Abbas Ali
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Re: Bids Invited for PIA Privatisation
^ Apparently Airbus A330 in PIA livery.
Abbas
Abbas
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Abbas Ali
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Re: Bids Invited for PIA Privatisation
Privatisation Commission Board Meeting Approves Prequalification Criteria and the Prequalification Committee for Evaluation of Bids/Interest to be Submitted for the Divestment of Pakistan International Airlines Corporation Limited (PIACL)
Islamabad: April 04, 2024 - The 217th meeting of the Privatisation Commission Board, being held under the chairmanship of the Federal Minister for Privatisation, Abdul Aleem Khan concluded today at the Privatisation Commission, Islamabad.
The Privatisation Commission Board in the two sessions held on 2nd and 4th April, 2024 gave approval of the Prequalification Criteria and the Prequalification Committee for the evaluation of bids/interests to be submitted for the divestment of Pakistan International Airlines Corporation Limited (PIACL).
At the meeting the Federal Minister for Privatisation Abdul Aleem Khan expressed that PIACL is a very attractive opportunity for both local and international investors especially after the restructuring of the airline where major liabilities of the company have been taken off its balance sheet.
The Federal Minister hoped that the Pakistani business community will also look at this opportunity with enthusiasm and will show their interest in acquiring the national airline.
The Privatisation Commission has invited Expression of Interest (EoI) from interested parties willing to bid for the majority stakes in PIACL through an advertisement published on April 2, 2024 in national and international newspapers. The Invitation for EoI and all related documents are available on Privatisation Commission’s website.
Press Release
Islamabad: April 04, 2024 - The 217th meeting of the Privatisation Commission Board, being held under the chairmanship of the Federal Minister for Privatisation, Abdul Aleem Khan concluded today at the Privatisation Commission, Islamabad.
The Privatisation Commission Board in the two sessions held on 2nd and 4th April, 2024 gave approval of the Prequalification Criteria and the Prequalification Committee for the evaluation of bids/interests to be submitted for the divestment of Pakistan International Airlines Corporation Limited (PIACL).
At the meeting the Federal Minister for Privatisation Abdul Aleem Khan expressed that PIACL is a very attractive opportunity for both local and international investors especially after the restructuring of the airline where major liabilities of the company have been taken off its balance sheet.
The Federal Minister hoped that the Pakistani business community will also look at this opportunity with enthusiasm and will show their interest in acquiring the national airline.
The Privatisation Commission has invited Expression of Interest (EoI) from interested parties willing to bid for the majority stakes in PIACL through an advertisement published on April 2, 2024 in national and international newspapers. The Invitation for EoI and all related documents are available on Privatisation Commission’s website.
Press Release
Dil Dil Pakistan... Jaan Jaan Pakistan
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Abbas Ali
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Re: Bids Invited for PIA Privatisation
In April 15 newspaper:
Privatization Commission - Government of Pakistan
Invitation for Expression of Interest (EoI)
Divestment of Pakistan International Airlines Corporation Limited (PIACL)
For acquisition of 51%-100% share capital together with management control of Pakistan International Airlines Corporation Limited (PIACL)
ABOUT THE AIRLINE
Pakistan International Airlines Corporation Limited ("PIACL"), a public limited company, is a flag carrier airline of Pakistan. The Government of Pakistan ("GOP") directly owns approximately 96% of the issued capital of PIACL.
PIACL mainly provides aviation services with the support of its ancillary segments assisting its aviation making it a full service airline. The business segments include passengers, ground handling, flight training, cargo engineering and flight kitchen.
Out of the total 20.5 million passengers traveling during 2023, PIACL has successfully maintained a prominent market share and has been the market leader since 1955. The airline serves approximately 5 million passengers per annum through access to 34 distinct destinations and carrying out 260 flights per week. PIACL has access to 97 international routes with slots in some of the most attractive international destinations providing direct flight access to passengers travelling between Pakistan and the large diaspora target markets.
The demand in the under-served Pakistani aviation market is expected to continue to grow at a CAGR of around 5.5% from FY 2024 — FY 2028. Pakistan's population and its extensive global diasporas provide solid foundation for growth of the aviation business.
TRANSACTION OVERVIEW
With the objective to restructure and privatise PIACL, GOP has incorporated a company limited by shares called PIA Holding Company Limited ("PIA Holdco"). PIACL and PIA Holdco have filed a Scheme of Arrangement ("SOA") with the Securities and Exchange Commission of Pakistan ("SECP") under the Companies Act, 2017, for inter alia, the transfer of certain non-core assets and non-core liabilities as set out in the SOA (the "Non-Core Undertaking") to PIA Holdco.
Pursuant to the SOA, PIACL will continue to hold certain core assets and core liabilities as set out in the SOA (the "Core Undertaking"). The Core Undertaking includes assets, liabilities, employees pertaining to air transport operations and allied services (including ground handling, flight training, cargo engineering and flight kitchen), rights and obligations under various operational agreements executed by PIACL including the air services agreements, code sharing agreements, fuel supply agreements, passenger sales agency agreements and foreign loan agreements. Pursuant to the SOA, the existing shareholders of PIACL will become the shareholders of PIA Holdco (in same proportion they currently hold in PIACL) and PIACL will become a wholly-owned subsidiary of PIA Holdco, with a single class of ordinary shares. PIA Holdco will be listed on the stock exchange and PIACL will cease to be listed.
The SOA filed with SECP is available at following link https://privatisation.gov.pk/EOIPIACL, which includes the split balance sheet setting out the Core Undertaking and the Non-Core Undertaking. The scheme sanctioned may vary from the SOA filed with SECP.
PIACL may enter into operational arrangements such as office space and sales offices with PIA Holdco on an arms-length basis if considered necessary for smooth and continued operations, which shall be determined during the course of the privatisation process of PIACL.
GOP and PIA Holdco through the Privatisation Commission of Pakistan ("Privatisation Commission") invites Expressions of Interest ("E0I") from prospective investors to acquire between 51% and 100% share capital of PIACL (consisting as a single class of ordinary shares) together with management control (the "Equity Stake"). The terms and conditions for transfer and acquisition of the Equity Stake shall be set out in the bidding documents, which shall consummate after sanctioning of SOA and completion of the privatisation process.
EOI AND RSOQ SUBMISSION INSTRUCTIONS
Interested parties that are companies, firms, body corporate or other legal entities (and not individuals or the Federal or Provincial Government of Pakistan or any enterprise owned or controlled by the Federal or Provincial Government of Pakistan) should submit EOls in duplicate in hard copy to the Privatisation Commission,4th Floor, New Pak Secretariat Building, Kohsar Block, Constitution Avenue, Islamabad, Pakistan and also send the EOls electronically at dgamc@privatisation.gov.pk with a non-refundable processing fee of USD 5,000/- (United States Dollars Five Thousand only) or PKR 1,400,000/- (Pakistani Rupees One Million Four Hundred Thousand only). The non-refundable processing fee can be paid in the form of bank draft/pay order payable in favour of "Privatisation Commission, Government of Pakistan", which should be submitted with the hard copy of the EOI or through wire/electronic transfers (details for which will be available at the Privatisation Commission link below). The EOI must be available with the Privatisation Commission and the processing fee must be paid, on or before 16:00 Hours, May 3, 2024. EOls must contain the following information:
a. Name of company/group and its background information (including profile, place of incorporation, ownership details);
b. In case of local interested parties, copies of Computerised National Identity Cards (CNICs) of Directors and Shareholders holding or controlling (by itself or in concert) directly or indirectly 20% or more voting power;
c. In case of foreign interested parties, copies of passports of Directors and Shareholders holding or controlling (by itself or in concert) directly or indirectly 20% or more voting power;
d. Name, address, email address, telephone numbers of authorised representative;
and
e. Latest audited financial statements of the company/group.
Upon receiving EOIs, required information and processing fee, a Request for Statement of Qualification ("RSOQ") will be issued to interested parties compliant with the requirements set out in this invitation for EOls (the "RSOQ Recipients"). The RSOQ Recipients must submit the Statement of Qualification ("SOQ") latest by 16:00 Hours, May 3, 2024. Only RSOQ Recipients that are determined by the Privatisation Commission (in its sole and absolute discretion) as meeting the requirements set out in the RSOQ will be issued bid documents, allowing them to participate in the due diligence and bidding process, provided they comply with the requirements to be stated in the bid documents.
Early submission of EOI will allow parties maximum amount of time for preparation of SOQs.
SOQ Submission Deadline
16:00 Hours Pakistan Standard Time on May 3, 2024
OTHER INFORMATION
At any stage, the GOP/Privatisation Commission may, inter alia, introduce incentives, modify the transaction structure or impose additional conditions on the RSOQ Recipients or pre-qualified parties.
Information regarding the submission of EOI, SOA, Investment Teaser, PIACL, PIA Holdco, PIACL Financial Statements, are available on the following websites of Privatisation Commission and PIACL respectively:
i. https://privatisation.gov.pk/EOIPIACL
ii. https://www.piac.com.pk/corporate
GOP/Privatisation Commission and the Financial Advisor (or any member thereof) reserve the right not to respond to any request for preliminary or other information. GOP/ Privatisation Commission further reserve the right to accept or reject any or all EOIs. This Invitation for Expression of Interest is intended only to seek expression of interest from interested parties. The details of the transaction, information memorandum, conditions of sale, draft bidding documents and process would be advised to pre-qualified parties only at an appropriate time as part of the privatisation process. Any interested party who has an interest in this transaction shall not be entitled to object at a later stage if further information, incentives or concessions are provided in relation to the transaction to pre-qualified interested parties or the scheme sanctioned by SECP varies from the filed scheme. To facilitate the privatisation, the GOP/Privatisation Commission reserve the right to amend the transaction structure at a later stage in its absolute discretion. Documentation accompanying and comprising an EOI as provided by any interested party shall not be reclaimed or returned. This advertisement and the information provided or referenced herein (including the PIACL Financial Statements, Investment Teaser and the SOA filed with SECP) is not intended to be, and should not be construed as: (a) an offer or invitation to acquire any securities and/or assets of PIACL; and/or (b) a representation or warranty, express or implied, with respect to any statement made herein or in any document referenced herein.
The Privatisation Commission has appointed EY Consulting LLC, as the Financial Advisor to conduct this transaction. Other consortium members are Haidermota & Co and FreshFields Bruckhaus LLP (Legal Advisors), Knight Frank Valuation Services LLC (Valuator), Bauer Aviation Advisory (Technical), Nutshell Communications Private Limited (Public Relations).
CONTACT INFORMATION
Privatisation Commission
KAMRAN FAROOQ ANSARI - Director General (I&T, P&U) Phone: +92 51 9204593 Email: dgamc@privatisation.gov.pk
ABDUL BASIT ABBASI - Transaction Manager Phone: +92 51 9246049 Email: abdulbasit@privatisation.gov.pk
Financial Advisor EY Consulting LLC
HANI BISHARA Partner, Strategy and Transactions Phone: +97143 129290 Email: hani.bishara@parthenon.ey.com
ZEESHAN HUSSAIN Partner, Strategy and Transactions Phone: +92 21 111 113 937 Email: zeeshan.hussain@pk.ey.com
Abbas
Privatization Commission - Government of Pakistan
Invitation for Expression of Interest (EoI)
Divestment of Pakistan International Airlines Corporation Limited (PIACL)
For acquisition of 51%-100% share capital together with management control of Pakistan International Airlines Corporation Limited (PIACL)
ABOUT THE AIRLINE
Pakistan International Airlines Corporation Limited ("PIACL"), a public limited company, is a flag carrier airline of Pakistan. The Government of Pakistan ("GOP") directly owns approximately 96% of the issued capital of PIACL.
PIACL mainly provides aviation services with the support of its ancillary segments assisting its aviation making it a full service airline. The business segments include passengers, ground handling, flight training, cargo engineering and flight kitchen.
Out of the total 20.5 million passengers traveling during 2023, PIACL has successfully maintained a prominent market share and has been the market leader since 1955. The airline serves approximately 5 million passengers per annum through access to 34 distinct destinations and carrying out 260 flights per week. PIACL has access to 97 international routes with slots in some of the most attractive international destinations providing direct flight access to passengers travelling between Pakistan and the large diaspora target markets.
The demand in the under-served Pakistani aviation market is expected to continue to grow at a CAGR of around 5.5% from FY 2024 — FY 2028. Pakistan's population and its extensive global diasporas provide solid foundation for growth of the aviation business.
TRANSACTION OVERVIEW
With the objective to restructure and privatise PIACL, GOP has incorporated a company limited by shares called PIA Holding Company Limited ("PIA Holdco"). PIACL and PIA Holdco have filed a Scheme of Arrangement ("SOA") with the Securities and Exchange Commission of Pakistan ("SECP") under the Companies Act, 2017, for inter alia, the transfer of certain non-core assets and non-core liabilities as set out in the SOA (the "Non-Core Undertaking") to PIA Holdco.
Pursuant to the SOA, PIACL will continue to hold certain core assets and core liabilities as set out in the SOA (the "Core Undertaking"). The Core Undertaking includes assets, liabilities, employees pertaining to air transport operations and allied services (including ground handling, flight training, cargo engineering and flight kitchen), rights and obligations under various operational agreements executed by PIACL including the air services agreements, code sharing agreements, fuel supply agreements, passenger sales agency agreements and foreign loan agreements. Pursuant to the SOA, the existing shareholders of PIACL will become the shareholders of PIA Holdco (in same proportion they currently hold in PIACL) and PIACL will become a wholly-owned subsidiary of PIA Holdco, with a single class of ordinary shares. PIA Holdco will be listed on the stock exchange and PIACL will cease to be listed.
The SOA filed with SECP is available at following link https://privatisation.gov.pk/EOIPIACL, which includes the split balance sheet setting out the Core Undertaking and the Non-Core Undertaking. The scheme sanctioned may vary from the SOA filed with SECP.
PIACL may enter into operational arrangements such as office space and sales offices with PIA Holdco on an arms-length basis if considered necessary for smooth and continued operations, which shall be determined during the course of the privatisation process of PIACL.
GOP and PIA Holdco through the Privatisation Commission of Pakistan ("Privatisation Commission") invites Expressions of Interest ("E0I") from prospective investors to acquire between 51% and 100% share capital of PIACL (consisting as a single class of ordinary shares) together with management control (the "Equity Stake"). The terms and conditions for transfer and acquisition of the Equity Stake shall be set out in the bidding documents, which shall consummate after sanctioning of SOA and completion of the privatisation process.
EOI AND RSOQ SUBMISSION INSTRUCTIONS
Interested parties that are companies, firms, body corporate or other legal entities (and not individuals or the Federal or Provincial Government of Pakistan or any enterprise owned or controlled by the Federal or Provincial Government of Pakistan) should submit EOls in duplicate in hard copy to the Privatisation Commission,4th Floor, New Pak Secretariat Building, Kohsar Block, Constitution Avenue, Islamabad, Pakistan and also send the EOls electronically at dgamc@privatisation.gov.pk with a non-refundable processing fee of USD 5,000/- (United States Dollars Five Thousand only) or PKR 1,400,000/- (Pakistani Rupees One Million Four Hundred Thousand only). The non-refundable processing fee can be paid in the form of bank draft/pay order payable in favour of "Privatisation Commission, Government of Pakistan", which should be submitted with the hard copy of the EOI or through wire/electronic transfers (details for which will be available at the Privatisation Commission link below). The EOI must be available with the Privatisation Commission and the processing fee must be paid, on or before 16:00 Hours, May 3, 2024. EOls must contain the following information:
a. Name of company/group and its background information (including profile, place of incorporation, ownership details);
b. In case of local interested parties, copies of Computerised National Identity Cards (CNICs) of Directors and Shareholders holding or controlling (by itself or in concert) directly or indirectly 20% or more voting power;
c. In case of foreign interested parties, copies of passports of Directors and Shareholders holding or controlling (by itself or in concert) directly or indirectly 20% or more voting power;
d. Name, address, email address, telephone numbers of authorised representative;
and
e. Latest audited financial statements of the company/group.
Upon receiving EOIs, required information and processing fee, a Request for Statement of Qualification ("RSOQ") will be issued to interested parties compliant with the requirements set out in this invitation for EOls (the "RSOQ Recipients"). The RSOQ Recipients must submit the Statement of Qualification ("SOQ") latest by 16:00 Hours, May 3, 2024. Only RSOQ Recipients that are determined by the Privatisation Commission (in its sole and absolute discretion) as meeting the requirements set out in the RSOQ will be issued bid documents, allowing them to participate in the due diligence and bidding process, provided they comply with the requirements to be stated in the bid documents.
Early submission of EOI will allow parties maximum amount of time for preparation of SOQs.
SOQ Submission Deadline
16:00 Hours Pakistan Standard Time on May 3, 2024
OTHER INFORMATION
At any stage, the GOP/Privatisation Commission may, inter alia, introduce incentives, modify the transaction structure or impose additional conditions on the RSOQ Recipients or pre-qualified parties.
Information regarding the submission of EOI, SOA, Investment Teaser, PIACL, PIA Holdco, PIACL Financial Statements, are available on the following websites of Privatisation Commission and PIACL respectively:
i. https://privatisation.gov.pk/EOIPIACL
ii. https://www.piac.com.pk/corporate
GOP/Privatisation Commission and the Financial Advisor (or any member thereof) reserve the right not to respond to any request for preliminary or other information. GOP/ Privatisation Commission further reserve the right to accept or reject any or all EOIs. This Invitation for Expression of Interest is intended only to seek expression of interest from interested parties. The details of the transaction, information memorandum, conditions of sale, draft bidding documents and process would be advised to pre-qualified parties only at an appropriate time as part of the privatisation process. Any interested party who has an interest in this transaction shall not be entitled to object at a later stage if further information, incentives or concessions are provided in relation to the transaction to pre-qualified interested parties or the scheme sanctioned by SECP varies from the filed scheme. To facilitate the privatisation, the GOP/Privatisation Commission reserve the right to amend the transaction structure at a later stage in its absolute discretion. Documentation accompanying and comprising an EOI as provided by any interested party shall not be reclaimed or returned. This advertisement and the information provided or referenced herein (including the PIACL Financial Statements, Investment Teaser and the SOA filed with SECP) is not intended to be, and should not be construed as: (a) an offer or invitation to acquire any securities and/or assets of PIACL; and/or (b) a representation or warranty, express or implied, with respect to any statement made herein or in any document referenced herein.
The Privatisation Commission has appointed EY Consulting LLC, as the Financial Advisor to conduct this transaction. Other consortium members are Haidermota & Co and FreshFields Bruckhaus LLP (Legal Advisors), Knight Frank Valuation Services LLC (Valuator), Bauer Aviation Advisory (Technical), Nutshell Communications Private Limited (Public Relations).
CONTACT INFORMATION
Privatisation Commission
KAMRAN FAROOQ ANSARI - Director General (I&T, P&U) Phone: +92 51 9204593 Email: dgamc@privatisation.gov.pk
ABDUL BASIT ABBASI - Transaction Manager Phone: +92 51 9246049 Email: abdulbasit@privatisation.gov.pk
Financial Advisor EY Consulting LLC
HANI BISHARA Partner, Strategy and Transactions Phone: +97143 129290 Email: hani.bishara@parthenon.ey.com
ZEESHAN HUSSAIN Partner, Strategy and Transactions Phone: +92 21 111 113 937 Email: zeeshan.hussain@pk.ey.com
Abbas
Dil Dil Pakistan... Jaan Jaan Pakistan
See you at:
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arshad.altaf
- Registered Member
- Posts: 787
- Joined: Fri Dec 25, 2015 1:24 pm
Re: Bids Invited for PIA Privatisation
Is privatisation the answer?
The newly elected coalition government led by Prime Minister Shehbaz Sharif is under immense IMF pressure to privatise several public-sector entities. PIA and power distribution companies (DISCOs) top the privatisation list. The privatisation of various public-sector companies is an integral part of the IMF’s conditions for a bailout package. Pakistan is looking for a fresh financial assistance plan of more than $6 billion. The government has once again renewed its commitment to privatise the remaining state-owned enterprises and assets.
The PML-N government wants to privatise the oil, gas and power sectors and other utilities and services. Minister for Privatisation Abdul Aleem Khan recently announced the decision to privatise PIA immediately. It appears that the government is bringing up the same old reasons to make a case for privatisation: financial losses, inefficiency, crippling services and overstaffing. It argues that the state has nothing to do with running enterprises.
Privatisation stands as a central pillar of neoliberalism and the free market. In today’s era, dominated by the free market and neoliberalism, the concept of a welfare state has largely faded away. Since the 1980s, there has been a widespread agreement among the ruling elite that the free market and neoliberal economic policies should be the guiding principles of our economy.
Privatisation plays a significant role in this agenda, aiming to reduce the state’s welfare role and its role in the redistribution of wealth in an attempt to minimise state interference in economic life.
The philosophy behind privatisation has its roots in the state’s role within the economy. International financial institutions and neoliberal economists argue that the state should focus on establishing regulations, while the ownership and operation of industries, services, and utilities should be left to the private sector. According to them, the state should only play the role of a regulator.
In simpler terms, privatisation means that the state no longer bears the responsibility for providing essential services to people. Instead, this responsibility is shifted to the private sector. Unlike the public sector, which aims to provide services either for free or at affordable rates, the private sector’s main drive is to maximise profits and wealth.
The history of privatisation in Pakistan shows that, while wealthy investors have reaped benefits, workers and ordinary Pakistanis have faced significant challenges. Workers have to deal with layoffs, low wages, and no legal protection against various forms of exploitation. To understand the detrimental impacts of privatisation, one can look at privatised banks and corporations and see who truly benefits from this policy.
Privatisation has, in many cases, been used to exploit the state’s assets and resources. This process often reveals a story of corruption, political favouritism, manipulation, and the formation of cartels. State monopolies have turned into private monopolies, and a segment of the ruling elite has frequently leveraged this policy for personal enrichment. Privatisation has played an important role in the elite capture of the economy.
Most state-owned industries and enterprises were privatised during the 1990-2008 period. We were told that the privatisation of public-sector enterprises will help reduce the budget deficit and our reliance on debts.
But after privatising almost all state-owned industries, more than 90% of the banking sector and 100% of the telecom sector, we are still living in an economic crisis. According to one estimate, nearly 82% of the Pakistani economy is in the hands of the private sector. Since the 1980s, we have gradually dismantled the public sector-led growth model established by the Zulfikar Ali Bhutto government. We cut public investment while the bureaucratic control of the public sector played its role in making the public sector largely inefficient.
Lack of investment, innovation, rampant corruption and bureaucratic control created crisis in the public sector. No government since the 1990s has tried to reform the public sector to make it efficient, corruption-free, service-oriented and consumer-friendly. Our private sector-led growth model might be working well for the capitalist class and big business, but it is not working well for the majority of Pakistanis and the national economy. Our economy has faced one crisis after the other in the last 30 years. We are still blaming the nationalisation drive of the PPP government in the 1970s for the economic crises caused by the neoliberal model and free market economic policies.
It is crucial to assess the outcomes of privatisation in Pakistan over the past three decades. Initial promises suggested that privatisation would reduce fiscal deficits and public debt, enhance the efficiency of privatised industries and services, lower prices, increase production rates, attract foreign and local investment, and boost employment and social spending.
Many believed it would alleviate poverty and improve living standards. However, the reality has not aligned with these promises. According to a World Bank report, 40% of the population in Pakistan lives below the poverty line.
Pakistan’s debt has soared to unprecedented levels. Poverty and unemployment have risen, while the means of production and wealth remain concentrated in a few hands. Prices have skyrocketed, making basic commodities unaffordable for many in society. Privatisation has also led to the loss of public-sector jobs and weakened workers’ rights — trade unions have been hit hard by privatization and neoliberal economic policies.
Privatisation was supposed to finance budget deficits, reduce losses, and enhance the efficiency of poorly managed entities to stimulate economic growth and create jobs. However, the promised jobs, robust growth, and economic opportunities have not materialised.
Instead of privatising loss-making enterprises, our governments sold the profit-making industries and corporations. The state kept the loss making entities (Pakistan Railways, PIA, Wapda and Pakistan Steel Mills) without making any serious effort to restructure or reform them.
Privatisation in Pakistan has fallen short of achieving its intended goals and commitments. This policy needs a serious review.
The writer is a freelance journalist.
Disclaimer: The viewpoints expressed in this piece are the writer's own and don't necessarily reflect Geo.tv's editorial policy.
Originally published in The News
https://www.geo.tv/latest/540245-is-pri ... the-answer
The newly elected coalition government led by Prime Minister Shehbaz Sharif is under immense IMF pressure to privatise several public-sector entities. PIA and power distribution companies (DISCOs) top the privatisation list. The privatisation of various public-sector companies is an integral part of the IMF’s conditions for a bailout package. Pakistan is looking for a fresh financial assistance plan of more than $6 billion. The government has once again renewed its commitment to privatise the remaining state-owned enterprises and assets.
The PML-N government wants to privatise the oil, gas and power sectors and other utilities and services. Minister for Privatisation Abdul Aleem Khan recently announced the decision to privatise PIA immediately. It appears that the government is bringing up the same old reasons to make a case for privatisation: financial losses, inefficiency, crippling services and overstaffing. It argues that the state has nothing to do with running enterprises.
Privatisation stands as a central pillar of neoliberalism and the free market. In today’s era, dominated by the free market and neoliberalism, the concept of a welfare state has largely faded away. Since the 1980s, there has been a widespread agreement among the ruling elite that the free market and neoliberal economic policies should be the guiding principles of our economy.
Privatisation plays a significant role in this agenda, aiming to reduce the state’s welfare role and its role in the redistribution of wealth in an attempt to minimise state interference in economic life.
The philosophy behind privatisation has its roots in the state’s role within the economy. International financial institutions and neoliberal economists argue that the state should focus on establishing regulations, while the ownership and operation of industries, services, and utilities should be left to the private sector. According to them, the state should only play the role of a regulator.
In simpler terms, privatisation means that the state no longer bears the responsibility for providing essential services to people. Instead, this responsibility is shifted to the private sector. Unlike the public sector, which aims to provide services either for free or at affordable rates, the private sector’s main drive is to maximise profits and wealth.
The history of privatisation in Pakistan shows that, while wealthy investors have reaped benefits, workers and ordinary Pakistanis have faced significant challenges. Workers have to deal with layoffs, low wages, and no legal protection against various forms of exploitation. To understand the detrimental impacts of privatisation, one can look at privatised banks and corporations and see who truly benefits from this policy.
Privatisation has, in many cases, been used to exploit the state’s assets and resources. This process often reveals a story of corruption, political favouritism, manipulation, and the formation of cartels. State monopolies have turned into private monopolies, and a segment of the ruling elite has frequently leveraged this policy for personal enrichment. Privatisation has played an important role in the elite capture of the economy.
Most state-owned industries and enterprises were privatised during the 1990-2008 period. We were told that the privatisation of public-sector enterprises will help reduce the budget deficit and our reliance on debts.
But after privatising almost all state-owned industries, more than 90% of the banking sector and 100% of the telecom sector, we are still living in an economic crisis. According to one estimate, nearly 82% of the Pakistani economy is in the hands of the private sector. Since the 1980s, we have gradually dismantled the public sector-led growth model established by the Zulfikar Ali Bhutto government. We cut public investment while the bureaucratic control of the public sector played its role in making the public sector largely inefficient.
Lack of investment, innovation, rampant corruption and bureaucratic control created crisis in the public sector. No government since the 1990s has tried to reform the public sector to make it efficient, corruption-free, service-oriented and consumer-friendly. Our private sector-led growth model might be working well for the capitalist class and big business, but it is not working well for the majority of Pakistanis and the national economy. Our economy has faced one crisis after the other in the last 30 years. We are still blaming the nationalisation drive of the PPP government in the 1970s for the economic crises caused by the neoliberal model and free market economic policies.
It is crucial to assess the outcomes of privatisation in Pakistan over the past three decades. Initial promises suggested that privatisation would reduce fiscal deficits and public debt, enhance the efficiency of privatised industries and services, lower prices, increase production rates, attract foreign and local investment, and boost employment and social spending.
Many believed it would alleviate poverty and improve living standards. However, the reality has not aligned with these promises. According to a World Bank report, 40% of the population in Pakistan lives below the poverty line.
Pakistan’s debt has soared to unprecedented levels. Poverty and unemployment have risen, while the means of production and wealth remain concentrated in a few hands. Prices have skyrocketed, making basic commodities unaffordable for many in society. Privatisation has also led to the loss of public-sector jobs and weakened workers’ rights — trade unions have been hit hard by privatization and neoliberal economic policies.
Privatisation was supposed to finance budget deficits, reduce losses, and enhance the efficiency of poorly managed entities to stimulate economic growth and create jobs. However, the promised jobs, robust growth, and economic opportunities have not materialised.
Instead of privatising loss-making enterprises, our governments sold the profit-making industries and corporations. The state kept the loss making entities (Pakistan Railways, PIA, Wapda and Pakistan Steel Mills) without making any serious effort to restructure or reform them.
Privatisation in Pakistan has fallen short of achieving its intended goals and commitments. This policy needs a serious review.
The writer is a freelance journalist.
Disclaimer: The viewpoints expressed in this piece are the writer's own and don't necessarily reflect Geo.tv's editorial policy.
Originally published in The News
https://www.geo.tv/latest/540245-is-pri ... the-answer
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Abbas Ali
- Site Admin
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- Location: Pakistan
Re: Bids Invited for PIA Privatisation
Express News
Extension in submission of Expression of Interest (EoI) document deadline date May 3, 2024, is expected due to lack of interest shown by investors in PIA privatization process, according to Express News.
Only two companies from Arabian Gulf country(ies) procured EoI document but have not submitted it, so far.
EoI document non-refundable processing fee is USD 5,000.
Abbas
Dil Dil Pakistan... Jaan Jaan Pakistan
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b78709
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- Posts: 191
- Joined: Thu Oct 27, 2022 7:08 pm
Re: Bids Invited for PIA Privatisation
What a will of Allah !