Islamabad: Pakistan will have to sell off its flag-carrier Pakistan International Airlines (PIA) if it wants the USD 7 billion economic package from the International Monetary Fund (IMF). Among the four companies that have pre-qualified for the bidding is Fauji Fertiliser Company Limited, part of the military-controlled Fauji Foundation, India Today has reported.
Pakistan prime minister Shehbaz Sharif met the bidders in Islamabad on Wednesday and has been quoted as saying that PIA’s bidding will take place on December 23, 2025 and the process be broadcast live on all media.
Dawn has reported that divestment of 51-100% in the struggling PIA is part of conditions set by the IMF for the economic package. Geo TV has also reported the same.
“We’re targeting Rs 86 billion in privatisation proceeds this year. For PIA, in the last round of bidding, 15% of the proceeds were going to the government, with the rest staying within the company,” Pakistan’s privatisation minister Muhammad Ali had told Reuters last month.
PIA’s divestment would be Pakistan’s first major privatisation effort in two decades, Dawn has reported.
“Four bidders have been pre-qualified for the sale: Lucky Cement Consortium, Arif Habib Corporation Consortium, Fauji Fertiliser Company Limited and Air Blue Limited,” it
reported.
Fauji Fertiliser is part of the Fauji Foundation, which has emerged as one of the biggest corporate players in Pakistan, a country where the military has fingers in every pie.
Asim Munir, who now heads Pakistan’s defence forces, does not hold a direct position on the Central Board of Directors (CBDs) of Fauji Foundation. He appoints the Quartermaster General (QMG) who is part of the CBD of the Fauji Foundation. It has been said that Munir exerts indirect influence over Fauji Foundation through the military’s institutional control, including appointments to key positions and alignment with national security and welfare priorities.
PIA’s divestment is crucial for Pakistan as it takes loans to refinance loans. In 2023, Pakistan was on the brink of defaulting on its debts, a result of its years of financial mismanagement. Defence is an area of major expenditure.
The USD 7 billion loan programme of the IMF for Pakistan was approved in September 2024. While USD 1 billion was disbursed immediately, the rest of the money was to be paid over a period of three years.
Pakistan is the IMF’s fifth-largest debtor. It has taken more than 20 loans from the IMF since 1958.
The PIA’s fortunes have also been on a downslide. In 2020, it came to be known that more than 30% of Pakistani pilots were flying with fake or questionable licences. There was a massive disruption in operations after 262 of them were grounded.
This scandal also led to a ban of the airline in Europe and the US. The losses suffered were huge and stood at PKR 200 billion.
The IMF wants Pakistan to offload this “white elephant” from its shoulders if the country wants the remaining package to be disbursed.