FY25 sell-off plan likely to be approved today

ISLAMABAD: The Cabinet Committee on Privatisation (CCoP) which is scheduled to meet on Friday (Aug 2) is expected to approve Privatisation Programme 2024-25, besides transfer of 322,640.900 shares of OGDCL to Petroleum Division or Pakistan Sovereign Wealth Fund (PSWF), sources in Privatisation Commission told Business Recorder.

The CCoP approved, in principle, 24 SOEs for inclusion in the privatisation programme along with other specific directions to Ministries/Divisions in respect of other SOEs.

CCoP directed Ministry of Privatisation to deliberate the rationale provided by respective ministries for not including 18 SOEs in the Programme. Detailed discussions were held with the respective administrative ministries in a consultative meeting held on May 22, 2024.

Categorisation of commercial SOEs: PM irked by delay in submission of summaries

The recommendations were formulated in respect of 16 SOEs for consideration of CCoP. Whereas two SOEs namely Pakistan Revenue Automation Pvt. Ltd (PRAL) and Pakistan Railways Freight Transportation Company (PRFTC) were referred by CCoP to CCoSOEs for decision regarding their categorization as strategic/essential in its meeting held on May 10, 2024.

Categorization of 41 SOEs is to be done by the CCoSOEs and the respective administrative ministries were required to complete the formalities as per para 11 of the SOE Policy, 2023 and submit summaries to the CCoSOEs for decision. Prime Minister’s Office also issued directives for completion of the process of categorisation of SOEs by May 27, 2024.

The date was subsequently extended till June 10, 2024. Similarly, the Finance Division has also been requested to review bilateral investment companies and the outcome will be placed before CCoP as soon as it is shared by Finance Division.

The CCoP will approve the following Policy Guidelines are recommended by the Privatisation Commission, for Privatisation Programme (2024-29), in terms of section 5(a) of the Ordinance: (i) loss-making Commercial SoEs shall be privatised on priority; (ii) foot print of the Federal Government shall be restricted to Commercial SOEs, having some national or strategic interest, declared as Strategic/Essential by CCoSOEs; (iii) profitable commercial SOEs shall also be identified to reduce federal foot print in economy; (iii) the programme shall have three phases (1 year, 1-3 years and 3-5 years); (iv) issues, including but not limited to, employees, property, legislation, regulations, liabilities etc. required to be addressed or likely to hinder the privatisation process maybe identified along with the proposed way forward; and (v) issues pertaining to SOEs included in privatisation programme shall be resolved by the concerned Ministries/Divisions, on priority, to avoid hindrances in execution of the transactions.

The following proposals for Privatisation Programme (2024-29), as recommended by PC Board and in view of directions of CCoP in its meeting held on May 10, 2024, in terms of section 5(b) of the Ordinance are to be approved: (i) 24 entities, as approved, in principle, by CCoP in its meeting held on May 10, 2024, will be approved for inclusion in the Privatisation Programme 2024-29 along with the phase indicated against each SOE;(ii) CCoP will consider recommendations of respective Ministries and Ministry of Privatisation with regards to 16 SOEs for their inclusion or otherwise in the Privatisation Programme; (iii) 41 SOEs, categorized as Strategic/Essential by the Divisions, require approval of the competent forum (CCoSOEs) as per para 11 of the SOEs Policy, 2023. SOEs categorized as Strategic/Essential by CCoSOEs shall not be considered for inclusion in the Privatisation Programme, and the SOEs, not categorized as Strategic/Essential, shall be placed before CCoP subsequently for inclusion in Privatisation Programme or otherwise; (iv) 04 SOEs currently on the active privatisation list may be delisted (NPPMCL, Republic Motors, JCC [observations raised by CDA] and Properties) as recommended by PC Board and also presented to CCoP in its meeting held on May 10, 2024; (v) only efficient power plants (Combined Cycle) carved out of the four GENCOs may be included in privatisation programme and earlier directions of CCoE/CCoP in its various meetings be complied with by Power Division. CCoP will direct Power Division to carve out efficient power plants (Combined Cycle) from GENCOs and privatise these as opposed to privatising GENCOs as a whole as suggested by Power Division.

The obsolete technology-based plants may be disposed-off by the Power Division; (vi) CCoP will direct Power Division to fast-track resolution of the prior actions/issues associated with privatisation of DISCOs with specific timelines, to avoid hindrances in the privatisation process and implementation by the Commission;(vi) CCoP will direct Administrative Ministries/Divisions to fast track resolution of issues associated with SOEs included in privatisation programme, with specific timelines, to avoid hindrances in its smooth implementation by Privatisation Commission; and (vii) CCoP will direct the Administrative Divisions and the Heads of SOEs of the entities approved for inclusion in privatisation programme 2024-29 to ensure completion of all formalities as provided in Model questionnaire, with specific timelines, and provide information to Privatisation Commission on prescribed format.

The sources said, six new suggestions for the privatization list include Postal Life Insurance Company Limited (PLICL), Zarai Taraqiati Bank Ltd., Utility Stores Corporation (USC), Jamshoro Power Company Limited (GENCO-I), Lakhra Power Generation Company Limited (GENCO-IV) and Hazara Electric Supply Company (HAZECO). The board observed that the Ministries had described many SOEs as strategic and essential but the decision in this regard can only be taken by CCoSOE.

OGDCL shares: Under the privatisation programme, 322,460,900 shares of OGDCL were transferred to Privatisation Commission for its divestment. Despite postponement of OGDCL privatisation the shares are still lying with PC.

The CCoP, while considering the summary of Privatisation Division, deferred matters and directed Law and Justice Division to holistically examine the provisions of Sovereign Wealth Fund Act, 2023 and submit recommendations before the CCoP in its next meeting.

The Law Division, in its opinion, stated that it is the absolute prerogative of the federal government to decide the transfer/placement of the remaining shares either to the Petroleum Division or to the Fund wherever it deems appropriate.

However, the transfer of shares to the PSWA will require adoption of the procedures as prescribed in section 9(1) of the Act.

Ministry of Privatisation has solicited CCoP approval for transfer of OGDCL shares (322,460,900) from PC’s Account to (i) Pakistan Sovereign Fund or (ii) Petroleum Division.

Copyright Business Recorder, 2024