Revised business plan: PIA buyer required to invest Rs70bn in 5 years: PC
A meeting of the Senate Standing Committee on Privatization was held under the chairmanship of Senator Dr Afnanullah Khan.
The meeting was attended by senators Zeeshan Khanzada, Bilal Ahmed Khan, Nadeem Ahmed Bhutto, Mohsin Aziz and other officials from Ministry from Privatization, Power Division and Zarai Taraqiati Bank Limited (ZTBL).
Aviation panel told: PIACL sell-off process almost over
Secretary Privatization Commission, while sharing the revised business plan of privatization of the national flag carrier, stated that the due diligence process has begun for pre-qualified companies in the PIA privatization. Starting next week, site visits and expert sessions will begin for pre-qualified companies.
Expert sessions will include briefings on aircraft conditions and routes, said Usman Bajwa.
To a query, he said that a decision has been taken to launch PIA flights to Manchester starting from August 14. However, there are security concerns for PIA's North American routes. Efforts will be made to resolve security concerns regarding North American routes.
He stated that PIA's current business model is not sustainable. In the previous bidding round, investors backed out because their demands were not met. He further briefed that now, investors will receive sales tax exemption on aircraft purchases.
The government had to inject Rs100 billion annually to keep PIA running. The services of the previous financial advisor have been re-engaged for PIA's privatisation.
During the meeting, the committee reviewed a report highlighting complaints of the pensioners of Pakistan International Airlines Corporation Limited (PIACL). It was also revealed that currently pension liabilities for 6,625 employees of PIACL amount to Rs14.87609 billion. Expressing concern, Chairman Committee Senator Dr Afnanullah Khan remarked that the pension amount is extremely low, asking how people are expected to survive.
In response, the Ministry of Privatization stated that pension policies are regularly revised and updated annually in line with allowances. The chairman directed that Grade/Scale wise pension details, including the amount received and the distribution process, be presented in the next meeting.
Privatization Commission informed the committee that the Board of the Privatisation Commission in its July 2025 meeting resolved as under:a) Pre-qualified the following interested parties as prospective bidders/pre-qualified bidders (PQBs): (i) Consortium comprising Lucky Cement Limited, Hub Power Holdings Limited, Kohat Cement Company Limited and Metro Ventures (Private) Limited; (ii) Consortium comprising Arif Habib Corporation Limited, Fatima Fertilizer Company Limited, City Schools (Private) Limited and Lake City Holdings (Private) Limited; iii) Fauji Fertilizer Company Limited, and iv) Air Blue Limited. b) Consortium comprising ASIL and Serene Air (Private) Limited, Bahria Foundation, Mega C&S Holding, Equitas Capital LLC, was not pre-qualified, as it did not meet the requirements of the Request for Statement of Qualification (RSOQ).
The PQBs have been invited to conduct buy-side due diligence by giving access to Virtual Data Room. The PQBs will also be invited for pre-bid conference/meetings for finalisation of bid documents, Privatization Commission added.
About the privatisation of power distribution companies, secretary Privatization Commission stated that the DISCOs face issues related to asset transfers, ownership of grid stations, and recoveries from government departments. The DISCOs are also facing challenges related to regulatory frameworks, payments to government entities, and pension liabilities and payments.
He further said that 51 percent to 100 percent assets of the DISCOs' will be sold. Three DISCOs will be privatised between January and June of the current fiscal year.
The committee was informed that the Pakistan Minerals Development Corporation (PMDC) is not yet included in Privatization list. Senator Zeeshan Khanzada questioned why this institution is being Privatized and asked about the purpose behind it. Senator Bilal Ahmed Khan also raised concerns, questioning why land is being granted/allotted if the government plans to privatise the institution. He further asked about the area under PMDC's operation and the quantity of mineral output.
Senators further queried the basis of the privatization decision, noting that the Petroleum Ministry lacks the mandate to privatise the PMDC.
In response, the minister clarified that the Cabinet Committee on SOEs is responsible for evaluating organisations and that the Petroleum Ministry can better explain its mandate. The committee was briefed on the privatisation process, which involves recommendations to the Board, Cabinet's approval, and hiring of financial/legal advisors through advertisements.
The evaluation criteria will then be assessed before final approval. The Chairman Committee Senator Dr Afnanullah Khan proposed that PMDC be invited to the next meeting to further deliberate on this matter.
Regarding ZTBL, the committee was informed that it is included in Phase One of the privatisation list approved by the government in August 2024. A total of 24 organisations are to be privatised. ZTBL is currently in the process of hiring a financial adviser. The ministry stated that the negotiations are in progress to finalise how ZTBL will be privatised.
Moreover, Senator Dr Afnanullah Khan questioned the delay in hiring a financial adviser, noting that the last meeting was held on January 31st, when the bids were submitted and evaluated. He expressed concern that nearly six months had passed without finalizing the appointment.
The ministry responded that the process typically takes six to eight weeks but was delayed due to high fee demands by one party nearly Rs500 million forcing a restart of the process. The ministry assured the committee that the complete privatisation process is now targeted to be completed within nine months.
Furthermore, Senator Zeeshan Khanzada raised a critical point upon the overall privatisation process of the entities. He further questioned the rationale behind privatizing the entities while highlighting the performance of the Privatization Commission. He urged that this issue be thoroughly discussed in the committee.
Copyright Business Recorder, 2025
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Recorder
an hour ago
- Business Recorder
Gas injustice in Balochistan
Uniformity in gas pricing may make for clean regulation, but in Pakistan's fragmented socioeconomic landscape, it often produces more friction than fairness. A case in point is Balochistan — where the prevailing gas tariff regime, especially the classification of almost all domestic consumers as 'Non-Protected,' continues to compound marginalization and fuel systemic inefficiencies. Under the current slab-based tariff system, 'Protected' consumers — typically low-income users — receive heavily subsidized rates. But in Balochistan, where winter gas consumption is naturally high due to sub-zero temperatures and the widespread use of gas for space heating, even low-income households routinely exceed the consumption threshold and are pushed into the Non-Protected category. As a result, poorer consumers face higher gas tariffs — in some cases exceeding industrial rates, irrespective of their actual capacity to pay. This pricing mismatch has done more than just burden household budgets. It has incentivized theft, tampering with meters, and bypassing infrastructure in areas where UFG (unaccounted for gas) already exceeds 50 percent. The socioeconomic impact has been no less severe. In a province already grappling with poverty and underdevelopment, high winter gas bills have only reinforced the perception of resource inequity and policy neglect — especially when 75 percent of domestic consumers elsewhere remain in the Protected bracket and benefit from over Rs100 billion in annual subsidies. Crucially, the disparity isn't just anecdotal — it's visible in household energy usage patterns. As per the Population Census 2023, Balochistan has the lowest share of households using gas for cooking and heating (just 17 percent), despite being one of the coldest regions. In contrast, over 70 percent rely on firewood, exposing the population to indoor air pollution and deforestation. This underscores a troubling reality: even where gas pipelines exist, access does not always translate into affordability. The pricing structure is effectively pushing vulnerable communities toward more hazardous and less sustainable energy sources. It's not that Balochistan consumes more gas by choice — it does so out of necessity. Linking subsidy eligibility purely to volume — without accounting for regional weather conditions or heating needs — results in an urban policy lens being applied to a province that exists in a very different climate, both literally and figuratively. Encouragingly, SSGC's latest revenue petition acknowledged the challenge and recommends extending the Protected tariff slab for colder regions, adjusting eligibility to cover up to 3.6 HM³ of consumption during harsh winters. Such a recalibration would recognize temperature-driven consumption rather than penalize it — and may be a necessary first step toward a regionally nuanced subsidy framework. The principle of uniform tariffs is commendable in theory — but unless accompanied by contextual fairness, it risks undermining its own purpose. In Balochistan, gas is not a luxury — it is survival. A slab-based pricing system that ignores that may be legal, but it is not just.
Express Tribune
a day ago
- Express Tribune
PSX retreats as investors lock in profits
Listen to article After riding high on a wave of optimism in the previous session, the Pakistan Stock Exchange (PSX) reversed course on Wednesday as investors opted to lock in profits. The KSE-100 index slipped 165.26 points, or 0.12%, closing at 139,254.36. Despite an early push that saw the index touch 140,202, selling pressure influenced trading through the remainder of the session, reflecting a cautious flip in sentiment. Arif Habib Corp MD Ahsan Mehanti commented that stocks closed lower amid institutional profit-taking in overbought shares and concerns over delay in privatisation of ailing state-owned companies. "Rupee instability, rising inflation and worries about foreign outflows triggered bearish activity at the PSX," he said. KTrade Securities wrote in its market wrap that the PSX witnessed a mixed session as investors opted to book profits at market highs, leading to a slight pullback in the benchmark index. The index touched intra-day high of 140,202 before retreating on selling pressure. KTrade expected the mixed trend to persist, with heightened volatility due to futures rollover and the ongoing earnings season, which may keep sentiment cautious. Among key negative contributors were Engro Holdings, HBL, MCB Bank and Pakgen Power. Arif Habib Limited (AHL) commented that the PSX failed to hold early gains above 140,200 and fell for the remainder of the session. Some 39 shares rose while 60 fell, with Bank AL Habib (+1.95%), Mari Petroleum (+1.04%) and Hub Power (+0.87%) being the key contributors to index gains. In contrast, Engro Holdings (-1.23%), Habib Bank (-1.23%) and Pakgen Power (-6.8%) were the biggest drags. During the trading session, PIA Holding Company (-1.2%) saw pressure as the airline's buyer would be required to invest Rs70 billion over five years under the revised business plan. Pre-qualified bidders are set to begin site visits and expert sessions from next week, AHL said. In addition, the State Bank of Pakistan's monetary policy announcement is scheduled for July 30. Among corporate announcements, Systems Ltd (+0.91%) was considering potential acquisition in the IT and IT-enabled services space. AHL expected the market outlook to remain positive, with focus still on 140,500 this week. JS Global analyst Muhammad Hasan Ather said that stocks experienced a slight pullback, with the benchmark index closing down 165 points at 139,254. After Tuesday's rally, profit-taking emerged as investors reassessed the sustainability of the optimism. Despite the initial momentum, profit-taking activities continued to dominate the market. Key sectors including banks and oil registered mild corrections. While near-term volatility is likely to persist, investor sentiment may improve if fiscal clarity emerges from the Federal Board of Revenue's negotiations with businessmen, Ather said. Topline Securities, in its report, noted that the market traded within a range throughout the session, moving between intra-day high of 140,202 and intra-day low of 139,105 amid futures rollover-related pressure. Key laggards included Enrgo Holdings, Habib Bank, Pakgen Power, MCB Bank and Meezan Bank, which collectively shaved 277 points off the index. In contrast, Bank AL Habib, Mari Petroleum and Hub Power offered some support by contributing 174 points, Topline mentioned. Overall trading volumes increased to 656.6 million shares compared with Tuesday's tally of 629 million. Traded value stood at Rs32.1 billion. Shares of 483 companies were traded. Of these, 211 stocks closed higher, 243 fell and 29 remained unchanged. WorldCall Telecom topped the volumes chart with trading in 55.4 million shares, rising Rs0.08 to close at Rs1.54. It was followed by Media Times with 38.4 million shares, up Rs0.6 to close at Rs3.67 and First Dawood Properties with 31.3 million shares, falling Rs0.89 to close at Rs6.75. Foreign investors sold shares worth Rs327.7 million, the National Clearing Company reported.
Business Recorder
a day ago
- Business Recorder
Privatisation of SOEs: PC to be given full legal autonomy: PM
ISLAMABAD: In a bid to accelerate the privatisation of loss-making state-owned enterprises (SOEs), Prime Minister Shahbaz Sharif pledged on Wednesday that the Privatization Commission would be granted full legal autonomy in an effort to eliminate bureaucratic red tape and extraneous interference in the country's privatisation process. The prime minister, while chairing a review meeting on progress of privatisation of SOEs, emphasised that reviving the country's ailing economy depends on the timely and transparent divestment of underperforming public sector entities. He described privatisation as a top priority for his administration, saying it must be handled 'effectively, comprehensively and efficiently.' SOE Act and MoF reporting: CCoSOEs grants SPD entities full exemptions 'Illegal occupation of valuable lands of national institutions is unacceptable under any circumstances,' he said, while urging caution in the disposal of such land. 'Every possible precaution should be taken.' The meeting focused on reviewing the progress of institutions slated for privatisation in 2024, including high-profile entities such as Pakistan International Airlines (PIA) and several power transmission companies, commonly referred to as Discos. PM Sharif directed that the Commission's efforts align with market conditions and adhere strictly to legal and transparency requirements. 'All decisions should be implemented fully and effectively,' he said. 'I will regularly monitor the progress of the ongoing work in the Privatization Commission.' The Privatization Commission officials briefed the prime minister on a phased strategy for privatising state enterprises, structured around legal, financial, and sector-specific factors. They noted that the plan, approved by the federal cabinet, is designed to meet both economic and institutional benchmarks within a fixed timeframe. The prime minister also underscored the importance of consulting professional experts and maintaining international standards throughout the privatisation and restructuring process. The push to privatise loss-making enterprises comes amid mounting fiscal pressures, with the government seeking to reduce its financial burden and attract private investment into sectors long plagued by inefficiencies and mismanagement. The meeting was attended by federal ministers Awais Leghari and Ahad Cheema, Chairman of the Privatization Commission Muhammad Ali, along with senior government officials and advisers. Copyright Business Recorder, 2025
