Pakistan's caretaker government has less than three weeks to make a series of decisions concerning the partial privatisation of PIA - Pakistan International Airlines (PK, Islamabad International) ahead of a general election on February 8. Caretaker Prime Minister Anwaar ul-Haq Kakar's administration has supported privatising 51% of the state-owned carrier. However, according to the Express Tribune newspaper, its agencies recently missed several deadlines to facilitate the process.

The report said that a Scheme of Arrangement to separate PIA's core and non-core entities was not lodged at the Securities and Exchange Commission of Pakistan because a requirement for statutory audited accounts covering the period to September 2023 and certificates of no objection from creditors had not been met.

Secondly, there is still no decision on whether Pakistan's Ministry of Privatisation will sell the airline to a foreign entity through negotiation or via a public competitive process. Both matters need to be settled and locked in before the privatisation process can commence. One of many government ministries and agencies involved in the process, the Special Investment Facilitation Council (SIFC), had set a January 11 deadline to file the necessary no-objection certificates and a January 20 deadline to decide how PIA will be sold. The required financial audits have also not been completed.

In addition, Pakistan's Cabinet Committee on Privatisation and the federal cabinet have yet to formally support a recent Privatisation Commission board decision to sell the 51% stake, split assets, and transfer debts off the airline's balance sheet.

PIA's current debt reportedly stands at around PKR825 billion rupees (USD2.95 billion), including PKR281 billion (USD1 billion) owed to banks, PKR163 billion (USD583 million) owed to the Ministry of Finance, PKR83 billion (USD297 million) owed for foreign creditors, PKR65 billion (USD232 million) owed to employees, and PKR457 billion (USD1.63 billion) in other debts. The plan is to hive off around PKR640 billion (USD2.29 billion) to make the airline a more attractive asset to potential buyers.

After the bulk of the liabilities are removed from PIA's balance sheet, which government ministry will take responsibility for them and what portion, if any, will be written off remains to be settled. The Pakistani tax office and state-owned fuel supplier are among the many creditors. The SIFC has set a new January 31 deadline to resolve this, but several ministries, including the Ministry of Finance, are reportedly reluctant to take on PIA's debts.

Three-time former Prime Minister Nawaz Sharif has the support of Pakistan's powerful military and is widely tipped to return to the role after the election. However, jailed former cricketer Imran Khan and his Tehreek-e-Insaf (PTI) candidates enjoy widespread grassroots support despite the best efforts of the ruling classes to sideline them. Sharif has previously supported privatising PIA but never did so while in office, while Khan has previously expressed his opposition to privatisation plans.