Taxpayers to pay Rs30b for PIA debt

The government has earmarked Rs73 billion for privatisation contingencies, with about Rs30 billion set aside to cover interest on legacy debt held by Pakistan International Airlines (PIA), according to Express Tribune. Government records show taxpayers will bear Rs30 billion in interest on Rs268.5 billion of PIA debt this fiscal year, debt that was moved into a new PIA holding company before the airline's sale. That interest bill is three times the Rs10 billion in cash the government received for the 75% stake sold to bidders.

The holding company has no independent revenue stream, and an official said it hopes to repay the loan by selling hotels. Of the Rs135 billion total bid money, only Rs10 billion reached the government, while the successful bidder is investing the balance in PIA. The same bidders are to pay Rs45 billion in cash for the remaining 25% shares.

Separately, the National Assembly standing committee on privatisation heard that sales tax exemption will extend to all airlines from fiscal 2027-28 to create a fair field. Finance committee chairman Syed Naveed Qamar argued that the cost of the 15-year exemption should be excluded from PIA's total sale price. Privatisation Commission officials said the government has already consulted the IMF on extending the exemption to other airlines.