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ISLAMABAD: The Privatisation Commission (PC) has failed to dispose off Services International Hotel (SIH), Lahore and Heavy Electrical Complex (HEC) in the third quarter of financial year 2020-21 as per schedule though they are at very advanced stages, sources said.

“We are all set to complete the privatisation of these public sector entities in current financial year. However, the process is slow due to the spread of third Covid-19 wave in the country,” said an official of PC.

Privatisation Commission will revisit its deadline of SIH and HEC which expired on March 31, 2021 in weekly review meeting to be held next week, the official said.

He maintained that most of the technical issues were resolved in the two transactions but due to Covid-19 and travel advisories issued by various countries, the potential buyers were unable to visit the sites.

The government approved reserve price of Rs 2.250 billion for the land and building of SIH. Transaction structure was approved by Cabinet Committee on Privatisation (CCoP) in August, 2020. Six interested parties were pre-qualified in December 2020.

The government had shortlisted investors for issuance of request for statement of qualification for the privatisation of HEC. As many as 12 expressions of interest (EoIs) were shortlisted for HEC. In November 2020, CCoP approved the transaction structure for the divestment of 96.6 per cent shares of HEC.

The government has already delayed major transactions for sale of two liquefied natural gas (LNG) fired power plants (1223 MW Balloki Power Plant and 1230 MW Haveli Bahadur Power Plant) projected to generate around $2 billion. However, the delay is attributed to issues like debt-equity ratio, granting income tax exemptions and Covid-19.

The privatisation process of Pakistan Steel Mills (PSM) is likely to be completed by September 2021 and financial advisers will be hired in current financial year before making a decision on whether to privatise power distribution companies (DISCOs) or hand over their management control to the private sector.

The federal government had succeeded in selling 23 state owned properties out of 27 in current financial year, which has generated Rs1.113 billion for the national kitty. The auctions of three properties including Rs 5 billion land owned by Republic Motors, a wholly-owned subsidiary of the Pakistan Industrial Development Corporation, were delayed due to unfavourable market conditions. The CCoP had approved reserve price of these properties at Rs6.62 billion in a meeting held on August 5, 2020. Sources in privatisation commission said that the government may not achieve the budgetary target of Rs100 billion from the privatization during current financial year. The government had budgeted Rs150 billion from privatisation programme in last fiscal year 2019-20.

While chaired a CCoP held on March 18, 2021, former Advisor to the Prime Minister on Finance Hafeez Sheikh had stressed the need to carry forward the process of privatization on fast track basis.

The government is considering giving some important responsibility to former finance minister Shuakat Tareen, who may be appointed as a federal minister or an adviser to the prime minister on finance. He served the Pakistan People’s Party (PPP) government from October 7,2008 to February 23, 2010. During his tenure, one transaction of Hazara Phosphate Fertilizer Ltd worth Rs 1.3 billion was completed, sources in PC said.

Cabinet Committee on Privatisation had directed the Privatisation Commission in October 2018 to privatise 18 public sector entities.

Copyright Business Recorder, 2021

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