ISLAMABAD: A parliamentary panel, on Thursday, was briefed on the progress being made in the privatisation of the National Power Park Management Co Ltd (NPPMCL), Jinnah Convention Centre (JCC) Islamabad, and the Services International Hotel, Lahore.
Taking up the issues related to the privatisation of the NPPMCL, the committee was informed that the entity was entrusted with the task of producing 2400MW power into the national system through its own resources. The company established two state-of-the-art RLNG-based combined cycle power plants; 1223 MW CCPP at Balloki, district Kasur and 1230 MW at Haveli Bhahdur Shah, district Jhang.
These plants are providing electricity to the national grid owing to their unparalleled latest technology and high efficiency. Haveli Bahadur Shah began commercial operations on May 9, 2018 and Balloki achieved commercial operations on July 29, 2018.
The Cabinet Committee on Privatisation (CCoP) in its meeting held on October 31, 2018, directed to initiate the process for privatisation of the NPPMCL, after obtaining the approval of the Council of Common Interests (CCI) in a meeting held on November 19, 2018.
Due diligence was completed in September 2019 and the CCoP in its meeting held on September 18, 2019 ratified the said CCoP's decision. Prequalification of 12 prospective investors was conducted.
However, numerous problems were identified during the diligence process; which was further overtaken by the Covid situation. Independent Power Producers' (IPPs) negotiations were another impediment that slowed the process. The committee, while reviewing the case enquired about the plant's efficacy and capacity charges.
The committee was informed that total return paid to investors would be 12 percent. However, if needed, the plants can be run at 100 percent capacity. The committee recommended that the plant's capacity must be revaluated and the process expedited.
Discussing the privatisation of JCC, the Committee was informed that its sale had been approved by the CCoP as part of the Active Privatization Program. However, the CDA was taken on board as member of the transaction committee and provided its input on the proposed transaction, which was ratified by the Cabinet. One of the clauses introduced by the CDA was that the JCC must be converted from amenity to commercial property.
This proposition was taken serious notice by the committee and it stressed that all such conversions must be minutely reviewed. The ministry assured the committee of its support. It was recommended that Senator Mohsin Aziz, chairman Senate Standing Committee on Interior take up the matter with the CDA.
This was due to the fact that the Privatisation Commission has on numerous occasions taken up the issue with the Ministry of Interior and asked for their intervention by advising the CDA to review the entire process and assisting the Privatization Commission to complete the transaction, so that investor confidence is maintained.
Deliberating over the privatisation process of the Services International Hotel, Lahore, the committee was informed of the challenges and impediments stalling the process. It was stated that in addition to other issues that have contributed to slowing the process transfer and postings within the department is another concern that demands attention since the whole process, in such situation has to be started from scratch.
The meeting commenced with a review of the status of recommendations made in the previous meeting. Senator Shamim Afridi chaired the meeting.
Copyright Business Recorder, 2021