The government of Pakistan disbursed $4.3 million to the financial consultancy firm Ernst & Young (EY) for the purpose of privatizing Pakistan International Airline (PIA), the nation’s flag carrier.
According to the National Assembly Standing Committee on Privatisation, this payment represents 63 percent of the total fee of $6.8 million, with the remaining $2.5 million to be paid upon the completion of the transaction.
In October 2024, Pakistan’s efforts to privatize its national airline encountered a significant obstacle. The government sought to divest a 60 percent stake in PIA, establishing a minimum price of Rs 85.03 billion. However, the process yielded only a single bid from Blue World City, a real estate development company, which proposed a mere Rs 10 billion—far below the government’s expectations.
During a committee meeting, the Privatisation Commission (PC) provided an explanation for the expenditure related to the unsuccessful bid for PIA. It was noted that the Pakistan Engineering Company (PECO) was incorporated into the privatization initiative in August 2024.
Earlier this month, the PC communicated to the government its readiness to make another attempt at privatizing PIA. A key recommendation discussed in the standing committee meeting was to abolish the 18 percent Goods and Services Tax (GST) levied by the government on the acquisition of new aircraft and fleet expansion.
The government has also engaged with the International Monetary Fund (IMF), which has indicated a willingness to eliminate the tax contingent upon the privatization of PIA.
In the meantime, the government led by Shehbaz Sharif is making another effort to privatize PIA. A report from ARY News last year suggested that the airline could potentially be sold to either Qatar or Abu Dhabi through a government-to-government (G2G) agreement.
