Pakistan International Airlines: Finally, Pakistani Army has entered Pakistan International Airlines (PIA) through the back door. Just two days before the bidding, Army Chief Asim Munir had removed himself from the list of bidders. There has since been speculation in the local and international media that the reason for the withdrawal was not what was being shown.
According to Geo News, Arif Habib Consortium has announced the inclusion of Fauji Fertilizer Company Limited (FFPL) in the consortium. Arif Habib has acquired 75 percent stake in Pakistan International Airlines by bidding Rs 135 billion in the auction held for the privatization process of Pakistan’s government airline.
FFPL made partner
The partnership will provide financial support and corporate expertise to the airline, the consortium said on Thursday. It said that Fauji Fertilizer will also be a part of the management along with Arif Habib Consortium. The consortium will invest Rs 125 billion in the first year to upgrade ground operations and overall services. Fauji Fertilizer Company Limited (FFPL) is a Pakistani fertilizer manufacturing company established in 1978. It is part of the Fauji Foundation, which is associated with the Pakistan Army. Four companies were involved in the bid. Of these, FFPL distanced itself at the last moment. There were many reasons for this. The biggest reason was that the Arif Habib consortium bid more than the government expected, which FFPL certainly could not do. This bid was Rs 4320 crore compared to the government’s estimated Rs 3200 crore. This resulted in a profit of Rs 1320 crore.
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Protecting reputation is also a reason
The second reason is that as per the established rules, the losing company will not be able to participate in PIA management. If this had happened, the dream of recently appointed Army Chief Asim Munir of interfering in the aviation sector would have been shattered. Another important reason was to protect one’s reputation. The path of privatization was being adopted with the support of IMF. If the Army had taken part, it would have sent a wrong message, because according to the terms of the auction, only a private company could buy the stake. Let us tell you, the biggest fear was of losing the bid and being out of the game. Being out meant losing the chance to make a comeback. Munir kept the withdrawal option under his control, because one of the rules of the auction was that the winning company could form an alliance with anyone of its choice.
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