Islamabad: Weeks after assuring the International Monetary Fund (IMF) that the long-delayed privatisation of Pakistan International Airlines (PIA) would be completed by July 2025, the federal government has once again pushed the deadline — this time to the final quarter of the calendar year. The delay further highlights the government’s ongoing struggles to implement its privatisation agenda.
According to Muhammad Ali, Adviser to the Prime Minister on Privatisation, the PIA bidding process is now expected between October and December 2025, with the expression of interest (EOI) set to be issued by the end of this month. Speaking at the Business Summit hosted by the Nutshell Group, Ali admitted that the government would also fail to privatise any other entity in the current fiscal year, missing its already modest target of collecting Rs30 billion through privatisation proceeds.
Just last month, the privatisation ministry had committed to the IMF that PIA’s EOI would be issued in March, followed by bidding in July. However, both deadlines have slipped. Once the EOI is published, potential investors will require 3 to 5 months for due diligence before placing formal bids.
The latest plan involves selling at least 51% of PIA’s shares to a private entity. However, it remains unclear whether government-affiliated organizations would be eligible as bidders — a point expected to be clarified in upcoming EOI documents. Complicating the matter further is the lack of transparency around PIA's financials. While there have been claims of profitability, the airline’s official accounts have not been made public to confirm whether those reflect operational profits or accounting adjustments.
The government’s first attempt to privatise PIA last year failed when only one bidder remained after two others withdrew over unresolved tax and debt issues.
Privatisation progress for other state-owned enterprises (SOEs) is also off-track. Despite selecting 24 SOEs for privatisation across three phases, no transaction has materialised since the programme was approved in August 2024. The first phase, which targeted 10 transactions in its first year, has fallen significantly behind schedule.
Privatisation of the House Building Finance Company (HBFC) has also been delayed. The cabinet had approved its sale through a negotiated competitive bidding process, but again, only one bidder came forward. The bidder’s valuation, originally due in March, is still pending.
Meanwhile, the privatisation of the First Women Bank Limited (FWBL) — earlier promised to the IMF by May — has also been postponed. Now, it may happen by July. The UAE has expressed interest in acquiring the bank, and a transaction commitment was signed in February 2025. Still, the bid offer expected by May has not been submitted yet.
Muhammad Ali cited key challenges, including policy inconsistency, bureaucratic inertia, and judicial delays, as major obstacles to reform. He also acknowledged a disconnect between foreign investors and Pakistan’s outdated economic framework, noting that issues like poor documentation and a complex tax structure hurt investor confidence.
Despite setbacks, Ali said the government remains committed to privatisation. “There is now a clear understanding at the top that the government needs to step out of business,” he stated, adding that privatisation would promote competition, productivity, and economic growth.
