ISLAMABAD: Finance Minister, Dr Abdul Hafeez Shaikh has reportedly grilled Privatisation Commission (PC) for using ‘delaying tactics’ in privatisation process of public sector entities (PSEs), well informed sources told Business Recorder.
He expressed anger at a recent meeting of Cabinet Committee on Privatisation (CCoP) when the issue of Discos privatisation came under discussion.
According to PC, past attempts for privatisation of Discos could not attain maturity due to multiple problems and complexities especially organised protest of labour unions against privatisation.
After deliberations among the stakeholders, a working group consisting of representatives from Privatisation Commission, Power Division, Pepco, CPPA-G and Nepra was constituted to identify the most optimal and prudent privatisation road map, including transaction structure and sequencing. A team of local and international experts was also taken on board with support from World Bank.
The report by the Working Group emphasised communication and an agreement with Discos staff.
It further recommended that the Discos transaction may be undertaken in batches and prior actions pertaining to Nepra and Power Division may be completed in parallel.
After examining various options, following modes were recommended for the private sector participation in the management of Discos: (i) concession model as the main form of bringing private participation for majority of eight Discos, other then Qesco & Tesco; and (ii) Management Contract for two Discos i.e. Qesco and Tesco.
It was further requested that Privatisation Commission may be allowed to submit a firmed-up proposal, including sequencing and hiring of Financial Advisor along with recommendations of the PC Board by first week of April, 2021.
During the ensuing discussion, SAPM on Power, Tabish Gauhar while commenting on the draft report, suggested that it would be more appropriate to privatise five Discos of Punjab in the first phase and remaining three more challenging Discos at the second stage.
He stated that it would be more appropriate to clarify the terms of concession as those are being misunderstood as sale of Discos; rather those are management contracts.
He stressed the need for cleaning balance sheets of Discos by clearing loan liabilities and receivable from the Government departments with equity, which would help the Discos borrow from banks for their functional restructuring.
SAPM on Revenue, Dr Waqar Masood, emphasised that the word "privatisation" was creating anxiety and unrest among the employees of Discos, which may create more difficulty in achieving government policy objectives. Therefore, there was a need to clarify the process, which is more of management contract rather than privatisation.
This will help build confidence and acceptability from the stakeholders especially the staff working in those organisations.
Finance Minister, Dr Abdul Hafeez Shaikh, who was chairing the CCoE meeting, expressed his dissatisfaction and concern over the delay in implementation of the privatisation process.
"A lot of time has elapsed since first directive of the CCoP in 2018. After that, CCoP directed a number of times to expedite the process but nothing concrete has happened so far," the sources quoted the Finance Minister as saying.
He directed to update the status of earlier directions of the Government and progress made on each direction so far. He emphasised that there was a dire need to implement the decisions of the CCoP expeditiously by engaging all the concerned Ministries /Divisions.
He directed that the way forward was to formulate a simple proposal with proper timeline instead of developing complex transaction structures. He assured his full support and assistance in expediting the process.
Copyright Business Recorder, 2021