ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet has directed the Strategic Planning Division (SPD) to clear all outstanding amounts payable to State Engineering Corporation Pension Fund (STEPF) and loans extended by the government to Heavy Electrical Complex (HEC) against its privatisation, sources close to Secretary Privatisation Commission told Business Recorder.
Last week, the SPD briefed the ECC about the case as stated in the summary. It was informed that privatisation of HEC was vigorously being pursued by Privatisation Commission (PC) with the bidders.
It was further noted that the Legal Advisor of Financial Advisor consortium to PC had frequently expressed concern on processing the HEC privatisation without transferring land which was still in the name of HEC; and that risks associated with privatisation of HEC could be addressed through transfer of land to HMC and KMC-3 as per its possession. It was highlighted that land in question was of strategic significance being located in precincts of strategic installations (HMC and HMC-3).
The SPD submitted the following proposals for consideration and approval of the ECC: (i) mutation of 159 acres land at village Usman Khattar and village Kolian, Taxila from State Engineering Corporation and HEC in the name of HMC; (ii) mutation of l00 acres land at village Usman Khattar and village Kolian, Taxila from State Engineering Corporation and HEC in the name of HMC-3; (iii) transfer of land being between two State Owned Entities (SOEs) will be on nominal price, to be borne by SPD; and (iv) mutation fee of all land to be transferred in the name of HMC and HMC-3 will be borne by the SPD.
The ECC held threadbare discussion on the issue. Finance Division argued that an amount of Rs.351.279 million (Principal amount of Rs.257.983 million and interest of Rs.93.296 million) up to June 30, 2022, was also a liability of SEC against the loans given by Federal Government.
Therefore, on receipt of outstanding dues of Rs.498.797 million (including interest of dividend of Rs.17.882 million) from HMC, SEC shall make repayment of outstanding loans of Rs.351.279 million (provisional) up to June 2022 to the federal government.
Finance Division suggested that the SPD may ensure that the land should be strictly used for strategic purposes and expansion of operation facilities. The Secretary Privatisation Division observed that transfer title of land in Taxila was a “condition precedent”, for completion of Share Purchase Agreement (SPA signed on April 1, 2022 by and between the incoming buyer IMS Engineering Private Limited, PC and SEC).
He pointed out that this was the 56the attempt to privatise HEC, which has been successful with 100 percent government shares in the entity now being sold to the highest bidder under a competitive bidding process. Privatisation Commission recommended transfer/mutation of HEC’S land in Taxila to any public sector organization (as may be deemed appropriate by the Federal Government) to avoid any legal complications, post privatisation.
After detailed discussion on the summary submitted by Joint Staff Headquarters/strategic Planning Division regarding ‘transfer of Heavy Electrical Complex and State Engineering Corporation land to HMC and HMC-3’ approved the proposal regarding transfer of SEC and HEC land to SPD.
Furthermore, the ECC decided the following: (i) the SPD to pay all the outstanding amounts payable to State Engineering Corporation Pension Management Fund (SECPMF); (ii) the SPD to pay all the loans extended by the federal government to SEC; and (iii) to enable completion of privatisation of transaction of HEC, the SPD shall carry out demarcation of the land at the earliest with the Land Revenue Department in coordination with Ministry of Industries and Production to ensure that all land in the name of HEC at Taxila is transferred in the name of HMC/HMC-3.
Copyright Business Recorder, 2022
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