Despite giving firm reassurances to the International Monetary Fund (IMF), the Pakistani government has once again pushed back the timeline for privatising Pakistan International Airlines (PIA), moving the expected bidding to the final quarter of 2025. This delay highlights the persistent challenges Islamabad faces in moving forward with its privatisation agenda.
In addition to the PIA delay, it has become evident that no other state-owned enterprises (SOEs) will be sold within the current fiscal year, effectively making the modest target of Rs30 billion in privatisation revenue unattainable.
PIA Privatisation Postponed Yet Again
Muhammad Ali, Adviser to the Prime Minister on Privatisation, shared during the Business Summit hosted by Nutshell Group that the bidding process for PIA is now anticipated between October and December of this year. Although earlier commitments were made to initiate the bidding by July 2025, and an Expression of Interest (EOI) was to be issued in March, both targets have slipped.
The adviser clarified that the EOI will now be released by the end of April 2025. Following its issuance, potential investors are expected to require three to five months for due diligence before bidding can proceed.
According to the updated transaction plan, the government will sell at least 51% of PIA’s shares to the private sector. However, there remains ambiguity about whether a subsidiary of a government body would be considered a private entity — a point that needs to be clearly outlined in the upcoming EOI documents.
Although there have been informal claims regarding PIA’s profitability, no official financial statements have been released to determine whether these are actual operating profits or simply accounting maneuvers.
Previous Efforts Fell Short
This is not the first setback. The initial attempt to privatise PIA in October 2024 failed after only one bidder came forward. Two other interested parties withdrew over disputes related to tax reliefs and outstanding liabilities.
To date, the current administration under Prime Minister Shehbaz Sharif has not managed to privatise a single SOE. With the fiscal year nearing its end, it appears unlikely that any privatisation will be completed before June.
Privatisation Programme Lagging Behind
Originally launched in August 2024, the privatisation plan outlined the sale of 24 state-owned entities across three phases. Ten transactions were scheduled for the first year alone. But with key deadlines being missed, the first phase is already significantly behind schedule.
The second phase spans the next three years and includes 13 more entities, while the final phase will extend over five years, focusing on just one major transaction.
Officials hope that the two parties initially interested in PIA will participate in this new round of bidding along with a new third contender.
House Building Finance Company Also Delayed
The government has also missed its timeline to privatise the House Building Finance Company. Although assurances were given to the IMF that the deal would be closed by the end of April, that too remains incomplete. The sale was approved through a competitive bidding process, but only one bidder remained. The valuation was to be completed by March, after which a final offer was expected.
First Women Bank Privatisation Slips to July
Muhammad Ali mentioned that, realistically, only PIA and First Women Bank Limited might be sold this year. However, even the bank’s privatisation, which was scheduled for May, has been deferred to July 2025.
The Cabinet Committee on Intergovernmental Commercial Transactions (CCICT) had green-lit a government-to-government deal with the UAE earlier this year. A transaction commitment agreement was signed on February 27, 2025, with expectations for a formal bid to arrive by May. As it stands, that too remains uncertain.
Structural Challenges Slowing Progress
Speaking candidly at the business conference, Ali pointed to several systemic hurdles impeding privatisation: inconsistent policies, slow legal processes, and bureaucratic resistance.
He also acknowledged a growing disconnect between foreign investors and the Pakistani economy, which he described as outdated and poorly aligned with modern economic needs.
“Our society has drifted away from merit, leading to disillusionment and even migration,” he said.
Ali emphasized the urgent need for tax reform and improved economic documentation to rebuild investor confidence.
Despite all the setbacks, the government remains committed to privatisation. According to Ali, this shift would drive competitiveness, efficiency, lower inflation, and broader economic growth. Efforts are underway to enhance the capacity of the Privatisation Commission to move faster and more effectively.
FAQs for Pakistani Readers
1. Why is the government delaying the privatisation of PIA again?
The delay is due to procedural hurdles, slow investor engagement, and internal decision-making bottlenecks.
2. When can we expect PIA to be privatised now?
Bidding is now expected to happen in the last quarter of 2025 — between October and December.
3. Will the government meet its Rs30 billion privatisation target this year?
No, the government is unlikely to reach its target as no major entity will be privatised in this fiscal year.
4. Which other state institutions are planned for privatisation this year?
Only PIA and First Women Bank Limited are still on the list for potential privatisation in 2025.
5. Who is interested in buying the First Women Bank?
The UAE has shown interest, and a transaction agreement has already been signed, though the final bid is still pending.
