The Privatisation Commission will today (Thursday) complete the process of hiring a financial advisor (FA) for the privatisation of two RLNG power plants - 1,230MW Haveli Bahadur Shah and 1223MW Balloki Power Plant. The National Assembly's Standing Committee on Privatisation was briefed on Wednesday about the ongoing privatisation plan of the Pakistan Tehreek-e-Insaf (PTI) government.
Privatisation Commission Secretary Rizwan Malik informed the committee that financial and technical evaluation of bidders for FA would be scrutinised today (Thursday). Around 8 international investment companies, banks and consortiums applied for the position of FA for privatisation of two power plants owned by National Power Parks Management Company Limited (NPPMCL).
On the basis of due diligence and road shows of NPPMCL, he said, the FA would advise the Privatisation Commission either to put the RLNG power plants on strategic sale or put entire plants on privatisation.
He further said the delay in privatisation of these power plants could have negative effect on their efficiency as they are running in public sector and their estimated value of $2 billion might reduce.
He said the government declined the offer of International Finance Corporation (IFC) to play its role as FA in privatisation of power sector entities. Although the IFC offered lucrative package, yet single bidding could make the process non-transparent and invite political criticism.
He further disclosed that a task force on energy would submit a comprehensive report on power sector till March 31 to decide future course of action.
The secretary said that in the first 18 months, Privatisation Commission will privatise seven entities which are on active list of privatisation. Rest 41 entities will be disposed of in 4 to 5 years period, he said.
The secretary said that SME bank is on top priority of privatisation list followed by First Women Bank. He said that State Bank of Pakistan and Ministry of Finance had directed the Privatisation Commission to dispose of the SME Bank. The accumulated losses of the bank reached Rs 1 billion and more financial losses are being added annually.
Consultant Asad Rasool explained that due diligence process of SME was completed in January 2018 and three potential buyers qualified for bidding but the further proceeding was stopped due to scheduled general election 2018.
He further revealed that 18.6 percent government's shares in Mari Petroleum Company Limited would be offered to major share holders - Fauji Foundation and Oil and Gas Development Company (OGDCL). As both the companies had right to first refusal, he added.
He said that privatisation of Services International Hotel is also in the active privatisation list. He further said that the title of Jinnah Convention Centre Islamabad will be transferred to Cabinet Division from Capital Development Authority (CDA). Strong resistance was seen on behalf of CDA on the transfer of under-utilised centre to the Cabinet Division.
Responding to a question regarding privatisation of State Life Insurance Company, he said the insurance company would be turned into a corporate and put on the Pakistan Stock Exchange on the basis of a feasibility study to be submitted by Ministry of Commerce.
He said the matter of Lakhra Coal Mines was disputed with the government of Sindh and is sub judice. The chairman committee observed that the government put all non-controversial and easy sale government entities in phase-I and rest of the entities are in Phase-II.
The secretary further said that Pakistan International Airlines (PIA) would submit its business plan to the government in March. He further said that PIA Investment Company in collaboration with Aviation Division is working on a feasibility study on privatisation of under-utilised Roosevelt Hotel, New York. On the basis of study, the entity would be put on the active list of privatisation.
Around six international companies from China and Russia had shown interest in reviving the Pakistan Steel Mills Corporation (PSM) which needs finance of Rs 400 million monthly for payment of salaries for the employees. The losses of PSM have reached Rs 200 billion, he added.
He further said the government has set up an 'Asset Management Committee' (AMC) to identify unutilised and unproductive assets of all ministries and divisions. The committee had held three meetings but no ministry or division is ready to share its unutilised asset. Now, every division and ministry is asked to bring three unutilised assets. These would be sold to private buyers to earn revenue.