The agonising ordeal of offloading PIA is finally at an end, as a consortium led by business tycoon Arif Habib has secured a 75% stake for Rs135 billion, after a protracted bidding war with another interested party. After haemorrhaging billions for decades as a state-owned enterprise due to mismanagement and political interference, the national flag carrier is mercifully denationalised, in what marks the completion of the first major privatisation transaction in about two decades.

The sale of the airline is a welcome sign, raising hopes for the government's long-stalled privatisation programme, critical to the ongoing efforts for achieving economic stabilisation and then mustering a sustained growth rate, to finally get going. However, the fact that no overseas companies were there in the bidding race is tantamount to no confidence in Pakistan's economy. Moreover, in the wake of the Rs135 billion deal, the government will only be Rs10.1 billion ($36 million) richer as the deal mandates that over 92% of the proceeds, i.e. approximately Rs125 billion, be reinvested directly into PIA.

It's unfortunate, to say the least, that an organisation that is behind the launch of quite a few successful airlines, including the UAE's Emirates, which is consistently ranked among the world's top airlines, could only grab peanuts against its sale. It speaks of the bad governance, maladministration, political intrusion and lack of accountability – all hallmarks of a poorly functioning officialdom – that have been running rampant for years. Appallingly, no government over the years can be absolved of the blame.

It is, however, hoped that the capital injection, as planned and pledged by the new PIA owners, would help turn things around for the national flag carrier to become profitable, thereby raising investor confidence so that other bleeding state-owned entities that are up for sale and failing to find any takers could also be offloaded.



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