The privatization of Pakistan International Airlines (PIA) in 2025, which saw the Arif Habib-led consortium acquiring a 75 percent stake for PKR 135 billion, has been criticized for its financial implications. Dr. Mohammad Zubair Khan, a former Pakistan Minister of Commerce, highlighted that most of the bid amount did not go to the government, with only Rs 10.125 billion being received as the actual sale price.
Khan pointed out that the government will inject Rs 124.875 billion into the airline post-sale, along with an additional Rs 80 billion from the buyer. When considering the Rs 654 billion in liabilities taken over by the government to make the airline attractive for sale, the total cost to the state amounts to approximately Rs 644 billion.
The transaction has been labeled as a ‘divestment at a loss’ strategy aimed at curbing future subsidies to the airline. Concerns have been raised over the financial arrangements, including the conversion of commercial debt into a sovereign-backed bond with a fixed 12 percent interest rate, ensuring bank profits regardless of PIA’s performance.
The article also highlights the potential shortfall of PKR 250 billion even if the Roosevelt Hotel, valued at $1 billion, is sold as planned. With redevelopment estimated to take eight years, the government could incur an additional PKR 256 billion in interest costs before realizing any profit, leading to significant financial burdens.
