The Privatization Commission (PC) will proceed for privatization of power sector distribution companies as well as insurance and banking sector transactions in a week contingent upon the approval of the Cabinet Committee of Privatization (CCoP) presided over by Prime Minister Shahid Khaqan Abbasi. This was stated by Minister for Privatization Daniyal Aziz while talking to media persons after the meeting of National Assembly's Standing Committee on Privatization presided over Syed Imran Ahmed Shah here on Wednesday.
The minister said that Prime Minister Abbasi has been requested to convene a meeting of the Cabinet Committee of Privatization (CCoP) to approve transactions structure of the entities on priority list. The CCoP meeting is likely in a week's time, said Aziz.
Earlier, briefing the meeting of the committee, the minister said a meeting of the PC Board on November 2, 2017 qualified potential bidders for acquisition of 93.88 percent shares of SME Bank and agreed to proceed for privatization of First Women Bank (FWB), House Building Finance Corporation (HBFC), and National Insurance Company Limited as per the PC Ordinance and according to a well thought-out plan. The Privatization Commission, the meeting was informed, is in process of initiating appointment of financial advisory consortium to undertake the Mari Petroleum Company Limited (MPCL) transaction. Pakistan Steel Mill Corporation (PSMC) transaction structure has been approved by the PC Board while the liability settlement plan in consultation with NBP, Sui Southern Gas Company (SSGC), and Ministry of Industries & Production is being finalized.
The PC Board in its meeting on 02.11.2017 also approved and recommended to the CCoP the initiation of process of strategic sales along with management control of power sector entities and in the first phase, Northern Power Generation Company Limited (NPGCL), FESCO, IESCO and GEPCO have been recommended for privatization.
The meeting was also informed that annual losses of ailing public sector enterprises have swelled to an unprecedented level, increasing the importance of restructuring and private sector participation to ease pressure on the fiscal deficit.
The PC official stated that the government extended bailout packages of Rs 76 billion to Pakistan Steel Mills, including employees' salaries till August 31, 2017. However, total debt and accumulated losses of PSM increased to Rs 99.4 billion and Rs 176.6 billion as of June 30, 2017, respectively.
The government also provided guarantees amounting to Rs 161.5 billion on behalf of PIA, as of June 30, 2017, whereas total borrowing and accumulated losses of PIA swelled to Rs 186.5 billion and Rs 316 billion as of December 31, 2016, respectively.
Daniyal Aziz acknowledged that the government has been using the privatization proceeds for deficit financing and stated he would ascertain and inform the committee about the exact quantum of amount used for deficit financing.
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