FAs’ hiring, other tasks: Privatisation ministry seeks a budget of Rs8.169bn

ISLAMABAD: The Ministry of Privatisation has sought a budget of Rs 8.169 billion for its privatisation-related activities including hiring of services of financial advisors for different transactions, well-informed sources told Business Recorder.

The Privatisation Commission regularly submits its annual budget estimates to Finance Division for grants from the federal government to cover employees related expenditures (ERE) and operating expenses under Section 14(1)(a) of the Ordinance, ie, grants from the Federal Government.

For, 2023-24, an amount of Rs 171 million was allocated whereas an amount of Rs 153 million is apportioned for PC in FY 2024-25 from the budget ceiling of Ministry of Privatisation.

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The supplementary contribution from the Privatisation Fund is utilized to meet shortfall in grants from the Federal Government in ERE and operating expenses and the expenditures on privatisation transactions including Financial Advisory Services Agreement (FASA) fees, Consultant’s salaries, PC Board Members privileges and facilities and other operational expenses in the performance of its functions. For 2023-24, an amount of Rs 149 million for operating expenses and Rs 3.433 billion for FAA expenses was approved by the CCoP on July 2023 and ratified by the Cabinet on July 26, 2023.

According to the privatisation ministry, it has prepared budget estimates for financial years 2024-25 in consultation with departments/sections of Privatisation Commission. A-Grants from the federal government: an amount of Rs 153 million (Rs 100 million for ERE and Rs 53 million for operating expenses) is allocated by the federal government against the budgeted demand of Rs 210 million;

B-supplementary contribution from privatisation fund: (i) operating expenses, Rs 288 million is budgeted of which Rs 100 million is for Consultant’s salaries, due hiring of 7 new consultants (4 in G-1 and 3 in G-II) and adoption of MP scales 2023, an amount of Rs 40 million is budgeted for transaction related incentives/rewards, an amount of Rs 24 million for legal expenses and Rs 31 million to meet shortfall in salaries and allowances of officers and staff; and (ii) an amount of Rs 7.728 billion is budgeted for FASA anticipating new transactions under the privatisation program 2024-29.

Of Rs 7.728 billion, Rs 1.1210 billion is required for PIA transaction, Roosevelt transaction Rs 2.142 billion, HBCL Rs 73 million, FWB Rs 32 million, SIH, Rs 8 million, contingencies Rs 48 million and Rs 4.214 million new transactions (four Discos, 70 percent budgeted in FY 2024-25 and ZTBL) expected under privatisation program.

After explaining the background, the privatisation ministry has sought approval of total amount of Rs 8.169 billion for FY 2024-25 of which Rs 8.016 billion will be for operating expenses and FASA whereas Rs 153 million will be grants from the federal government for ERE, operating expenditure.

The PC Board, in its meeting on July 4, 2024 approved the estimates for PC for the FY 2024-25 to the tune of Rs 8.169 billion, the sources said adding that now in terms of section 14(2) of the Ordinance, approval of the CCoP has been solicited for budget estimate of PC for the year 2024-25.

Copyright Business Recorder, 2024