ISLAMABAD: Federal cabinet is expected to deliberate on the factors that would assist in the determination of whether to undertake privatisation through open bidding on government to government (G2G) basis, seek a strategic partner, or sell shares on the stock exchange.
An anecdotal survey by Business Recorder revealed that economists differed on which was the best way forward though there was agreement that for privatization to succeed a conducive investment environment was critical – an environment which is lacking in Pakistan today.
On September 14, caretaker Prime Minister Anwaar-ul-Haq Kakar replaced Shamshad Akhtar as chairman of the Cabinet Committee on privatization (CCoP) and appointed Fawad Hassan Fawad as the Federal Minister for Privatization leading to speculation that the privatization process would be a top priority of the caretakers.
SOEs Policy: CCoSOEs to put up final draft to cabinet for approval
In his first press conference on September 19, four days after his appointment, Fawad Hassan Fawad clarified that the privatisation programme of the caretakers was within their mandate, entrusted by the eleven-party Pakistan Democratic Movement led elected government; and added that the interim government was fully empowered under law to expedite the process of privatization of loss-making SOEs.
“Our mandate is only to keep the procedure of privatization going which was initiated by the elected government,” emphasized the minister.
Sources in the Privatization Commission told BR that the evaluation process of some key state owned entities (SOEs) including Pakistan International Airlines would be completed before the end of interim government’s tenure.
PC has yet to hire a financial advisor (FA) for assets evaluation of Pakistan International Airlines Corporation Limited (PIACL) and Roosevelt Hotel New York. The date for appointment of FA for Roosevelt Hotel, New York City USA has been extended for one month - from October 9 to November 8, 2023.
Sources acknowledged that the prevailing economic conditions provided a challenge to the government to move forward with privatisation of loss making entities but added that best efforts were being made to expedite the process.
The outgoing PDM government did not budget any privatisation proceeds for fiscal year 2023-24. Out of 27 entities on the active list of privatisation, First Women Bank, House Building Finance Corporation, and Jinnah Convention Centre are at an advanced stage. According to a statement of PC, the government had been bearing accumulating financial losses of ten mega SOEs estimated at Rs 2.4 trillion from 2018-2021.
“Privatisation prospects in the country are bleak with many multilateral companies winding up business in recent months. In such a situation foreign investment in the country and privatisation appear unlikely,” so stated officials on condition of anonymity.
Copyright Business Recorder, 2023
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