IPPs eye power firms; ZTBL bad loans raise red flags
Pakistan International Airlines is gearing up to resume flights to the UK next month as the government’s fast-tracked privatization drive gathers steam, with pre-qualified bidders launching due diligence on the national carrier.
PIA’s virtual data room opened July 14 and four groups—two consortia and two firms—have been greenlit to bid. Privatization Secretary Usman Akhtar Bajwa told the Senate panel on privatization Tuesday that competitive offers are expected, especially after the UK lifted its five-year ban on PIA, paving the way for a Manchester-bound flight launch by August 14.
The four pre-qualified groups include:
- Consortium 1: Lucky Cement, Hub Power Holdings, Kohat Cement, and Metro Ventures
- Consortium 2: Arif Habib Corporation, Fatima Fertilizer, City Schools, and Lake City Holdings
- Solo bidders: Fauji Fertilizer Company and Air Blue (Pvt.) Ltd.
Meanwhile, up to 10 independent power producers (IPPs) have expressed preliminary interest in buying state-run electricity distribution companies—IESCO, GEPCO, and FESCO—part of the 24 entities on the active privatization list.
The Power Division revealed that 162 out of 450 properties of the three utilities are being transferred to their own names to smooth the sale process. These include 83 properties of FESCO, 70 of IESCO, and nine of GEPCO—and their titles are still with provincial governments, WAPDA, or cantonment boards.
In a separate briefing, advisors flagged red flags at Zarai Taraqiati Bank Ltd. (ZTBL), which has racked up Rs80 billion in bad loans—nearly wiping out its Rs88 billion equity. Although recoveries have reduced defaults from Rs100 billion in June 2023, the scale of non-performing loans remains “deeply concerning,” said Prime Minister’s Privatization Adviser Mohammad Ali. Bajwa noted its privatization may take up to nine months.
The committee, chaired by Senator Afnan Ullah Khan, also debated the Petroleum Division’s push to privatize Pakistan Mineral Development Corporation (PMDC). Lawmakers expressed concern over including strategic or profitable firms in the sell-off list. PMDC is currently not on the privatization list.