It finally happened. After decades of losses, political drama, and failed auctions, our national carrier Pakistan International Airlines (PIA) has been sold. Yes, Good People To Fly With, that PIA Sold.
The headline number is PKR 135 Billion. The winner is the Arif Habib Consortium.
On the surface, 135 billion sounds like a decent chunk of change. You might be thinking, “Great! That pays off some national debt!” Wrong.
When you peel back the layers of this deal, the math is terrifying. Here is the breakdown of what actually happened to your asset.
1. The Debt: The 800 Billion Rupee Elephant
The most important number isn’t the sale price; it’s the debt. Before this sale, the government split PIA into two:
- “Good PIA” (The planes, the routes, the landing rights).
- “Bad PIA” (The Debt).
The government parked approximately PKR 650 – 800 Billion of old debt into a separate “Holding Company.” Who pays that? You do. The taxpayer. The buyer gets the airline clean. We, the public, are still on the hook for the loans PIA took out over the last 30 years.
2. The Buyers: Who is in the Cockpit?
While the media is flashing “Arif Habib Consortium,” the actual composition of the group is interesting. The winning bid was placed by a consortium led by Arif Habib Corporation, which originally included heavy hitters like Fatima Fertilizer, Lake City Holdings, AKD Group, and City Schools.
But here is the update: After winning the bid, it was confirmed that Fauji Fertilizer Company (FFC) is also joining the deal as a partner. So, the new ownership structure is a mix of Pakistan’s biggest private business tycoons and one of the country’s largest corporate giants, FFC.
3. The “Cash” Myth: Where is the 135 Billion?
Here is the kicker. The government isn’t getting a check for 135 billion rupees. According to the deal structure:
- 92.5% of the sale money must be reinvested into the airline (to buy new planes, fix engines, etc.).
- 7.5% goes to the Government.
Let’s do the math:
- 7.5% of 135 Billion = ~10 Billion PKR.
- Reports suggest that after deducting the Privatization Consultant Fees (which are rumored to be around 4 Billion PKR) and other transaction costs, the net cash landing in the national treasury is somewhere between 6 to 8 Billion PKR.
Yes, you read that right. We sold our national airline, with all its routes to London, New York (rights), and Toronto, for a net cash profit that barely covers the cost of a few Metro Bus stations.
4. The Consultant Fee Scandal?
If the reports of a 4 Billion Rupee payout to consultants and advisors are true, we have serious questions.
- The Math: If the government nets ~6-10 billion, and the consultants take 4 billion, that means the “middlemen” made almost 40-50% of what the State made.
- The Question: Who negotiated this? And why does a consultant get paid billions to tell us to sell an asset for peanuts?
Conclusion: Was it a Good Deal?
It depends on how you look at it.
- The “Yes” Argument: PIA was bleeding 100 Billion PKR a year in losses. By selling it, we stop the bleeding. Even if we gave it away for free, we save 100 billion a year in future bailouts. It’s like cutting off a gangrenous leg to save the body.
- The “No” Argument: We took on 800 billion in debt, paid consultants billions, and handed over a strategic asset with valuable global landing slots for a net receipt of ~6 billion. That feels less like a sale and more like a looting.
My Verdict: We didn’t “sell” PIA. We paid someone to take it off our hands. The buyer got a clean airline. The consultants got their billions. The public got the 800 billion debt bill.
Welcome to Privatization 101.
What do you think? Did we get ripped off, or was it necessary to get rid of the “White Elephant”? Let me know in the comments!