ISLAMABAD: The Privatisation Commission has informed the National Assembly Standing Committee on Privatisation that the government roadshows for privatisation of the Heavy Electrical Complex (HEC) at home and abroad would be held at the end of the current month as the last date for submission of Expression of Interests (EoI) is February 9, 2021.
The meeting of the Standing Committee on Privatisation presided over by Syed Mustafa Mahmud was given a briefing on the HEC, Taxila as well as a comprehensive briefing on the vision and further three years plan of the Ministry of Privatisation on Thursday.
Members of the committee expressed serious concern over the government’s privatisation policy, and stated that it remains unclear whether it wants to privatise loss-making or profit-making entities.
Members of the committee further stated that if the government was unable to privatise most viable RLNG power plants during the last two years then how the HEC which is not viable can be sold.
The Privatisation Commission also informed the committee meeting that the government has selected 10 SOEs for the forensic audit to determine the causes of pushing them into losses.
A senior official claimed that Privatisation Commission was informed by the financial adviser that serious queries have been received from interested parties.
The meeting was informed that three attempts have been made since 2010 to privatise the HEC.
The meeting was informed that assets of the company stood at Rs2.52 billion.
The standing committee was also informed that 30 percent power transforms were being manufactured by the HEC and the PEL, whereas 70 percent were being produced by the Chinese companies.
A power transformer costs Rs60 to Rs70 million and the HEC, facing financial constraints has made only one new transformer in 2020, while it repaired 44.
The meeting was informed by the additional secretary, Ministry of Industries and Production that the HEC was established to manufacture power transformers exclusively for Wapda/KESC locally.
It is the only one in the public sector and one of two power transformer manufacturers in Pakistan.
It also has an un-matched elaborate set up for rehabilitation of heavy power transformers.
The Committee was further informed that in the very beginning, working capital was not provided adequate to the company and mostly the orders are without advance.
The meeting was told that payments by DISCOs against the HEC supplies were delayed.
The committee was further told that an amount of Rs382 million has been deducted by Wapda/NTDC/DISCOs so far and a substantial amount remains stuck-up with the FBR on account of income tax and sales tax refunds – Rs239 million receivable on 30.06.2020.
The committee was also informed that the company earned profits in seven out of previous 15 years with substantial profits in the year 2007 and 2008.
The officials of the HEC, while giving a briefing, informed the standing committee that the HEC was put on active privatisation list after the Cabinet Committee on Privatisation (CCOP)’s decision dated August 08, 2019.
The CCOP vide decision dated November 16, 2020 approved sale of all (96.6 percent) government-owned shares.
The EOI has been issued by Privatisation Commission on 27-12-2020 with submission date is 09.02.2021.
The Committee recommended that the downfall of the HEC as well as reasons for non renewal of type testing license should be informed to the Committee in the next meeting. The Committee also recommended that bidding process should be transparent in all respect, and sought criteria for privatisation of government entities.
The Standing Committee of the National Assembly also sought in-camera briefing on Roosevelt Hotel, USA, in the next meeting, and directed the managing director of the hotel and the chairman of the Pakistan International Airlines (PIA) to appear in the committee to brief the committee as a news was published that the hotel was sealed.
The meeting was attended by Zulfiqar Ali Khan Dullah, Umer Aslam Khan, Khurram Shahzad, Faheem Khan, Mukhtar Ahmed Malik, Muhammad Pervaiz Malik, Dr Aisha Ghous Pasha, Seema Mohiuddin Jameeli, Sikandar Ali Rahoupoto, MNAs, Minister for Privatisation, Secretary Privatisation, beside senior officers from the Ministry of Industries, and Power Division, etc.
Copyright Business Recorder, 2021