The Pakistan International Airlines spokesperson has described the unexpectedly low bid for the national flag carrier’s privatisation as “unfortunate.”

“There were high expectations surrounding the privatisation process as the PIA is one of the oldest airlines in the world, and such a low bid does not reflect its potential as a profitable entity,” Abdullah Hafeez Khan said while appearing on Aaj News show News Insight with Amir Zia on Thursday.

He was on the programme after the bidding process for PIA was halted. The Privatisation Commission attracted Rs10 billion for the national carrier against its valuation of Rs85 billion.

Cash-strapped Pakistan is looking to offload a 51-100% stake in debt-ridden PIA to raise funds and reform bleeding state-owned enterprises as envisaged under a $7 billion International Monetary Fund programme.

Initially, the commission had deemed six bidders eligible, allowing them to participate in the bidding for the loss-making national carrier. But five of such bidders have opted out of the process.

The government had shortlisted the following companies for majority shares in the national airline: Air Blue Limited, Arif Habib Corporation Limited, Fly Jinnah, YB Holdings Private, Pak Ethanol Private, and the Real Estate Consortium Blue World City.

Khan explained that since PIA was restructured into PIA Holding Company and PIA Sales, the debts that had burdened the airline’s balance sheet for the past two decades were “cleared.”

He added that such a financial relief allowed the airline to emerge as a “clean company” and PIA “is now a profitable organisation” at the operating level.

The spokesperson added that the value of the London Heathrow route alone is estimated at $100 million, equivalent to Rs30 billion, which includes properties, assets, and a fleet of 33 aircraft. The airline possesses 17 A320 aircraft, with each aircraft priced between $120 million to $150 million, he said and added that a new A320 would cost over Rs30 billion and even if the planes are older, their value should still be recognised.

According to Khan, “confusion” during the bidding process affected the mindset of potential investors.

“The PIA is an international entity that requires substantial foreign investment for its operations; however, foreign investors stayed away from the entire process. The few investors who participated were unable to accurately assess PIA’s books and assets.”

He noted that no Western country or company was involved in the privatisation effort. The Privatization Commission had reached out to friendly nations, but none of them were among the eight companies that initially expressed interest, Khan added.

“We will need to get back to work and prepare from the beginning,” he said.

Despite the restructuring of PIA, the total value of its assets on the balance sheet amounts to Rs165 billion, with 60% of the shares offered for privatisation valued at Rs99 billion.

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Local investors involved in the process expressed frustration over the inaccurate data and misrepresentation provided by the Privatisation Commission and their technical advisors. They even halted the privatisation process for three months to conduct a fresh audit of PIA’s annual accounts, but ultimately chose to withdraw from the bidding.

When contacted by Amir Zia, one of the investors stated that “uncertainty” regarding PIA’s international routes and ambiguity surrounding the volume of debt were the “primary reasons” for their decision to refrain from participating in the bidding process.

The only bidder in the privatization process submitted a proposal that demonstrated experience limited to real estate, “making an unserious bid that was inadequate even for the value of a single PIA aircraft.”