The Cabinet Committee on Privatisation (CCoP) has put off the privatisation process of Lakhra Coal Development Company (LCDC) as the matter is in litigation subsequent to denial of lease renewal request by the Sindh government in 2015. Sources said the meeting of the CCoP chaired by Finance Minister Asad Umar was informed that the government of Sindh has declined the request for renewal of lease, expired in 2015, and the matter of renewal of lease is sub judice before the Supreme Court of Pakistan.
The CCoP was further stated that LCDC is a joint venture of Pakistan Mineral Development Corporation (PMDC), government of Sindh (GOS) and Water and Power Development Authority (WAPDA) with equity capital of Rs 50 million shared in the ratio of 50:25:25 respectively. The company is operating under the administrative control of Ministry of Petroleum and Natural Resources, government of Pakistan, through PMDC.
The LCDC was incorporated as a public limited company on February 06, 1990 under the Companies Ordinance, 1984 and is spread over an area of 8,000 acres with the primary objective to supply coal to coal fired power plant of WAPDA at Khanote, district Jamshoro, Sindh, named as Lakhra Power Generation Company Ltd (LPGCL).
As per the Principal Shareholders Agreement executed by and among PMDC, GOS and WAPDA, in case of exit by any of the parties, the remaining parties have the first right of refusal. Owing to the aforementioned reasons, the Ministry or Energy (Petroleum Division) has recommended delisting of LCDC from the active privatisation programme.
The Cabinet Committee of Privatisation (CCoP) on October 31, 2018 approved the privatisation of LCDC as part of the active privatisation programme; however, in view of the fact that LCDC is the sole supplier of coal to Lakhra Power Generation Company Limited (LPGCL), Privatisation Commission (PC) might not be in a position to proceed with the transaction until issues related to the renewal of lease are resolved. Ministry of Privatisation was of the view that it is also a considered opinion that as opposed to stand alone privatisation of LCDC, an integrated approach, wherein, LCDC be marketed for privatisation together with LPGCL, as a package to circumvent adverse implications of privatisation of LCDC on LPGCL.
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