The Privatisation Commission (PC) will dispose of 263 kanals prime land of Pakistan Engineering Company Limited (PECO) to meet its accumulated losses. This was told to the Public Accounts Committee's sub-committee, which met here on Wednesday with Sardar Ashiq Hussain Gopang in the chair. The meeting examined the audit reports of the Ministry of Industries and Production for fiscal year 2007-08.
The committee was told that PECO had been directed to device a strategy to pay back the government loans. Review of the audit reports revealed that debt equity ratio had been 4.58 times in 2007-08, which showed the management had been financing its assets through heavy borrowing. It was observed that the PC had so far sold out 6 kanals of land to retire the government debt.
The committee also reviewed the audit reports of Pakistan Machine Tool Factory (PMTF), Pakistan Engineering Company and Heavy Electrical Complex. The committee directed the PMTF management to submit its future business plan, as the entity had been placed on the privatisation list. It was observed that the operating loss of PMTF before tax during 2006-07 had been 69.225 million as compared to Rs 12.243 million for 2005-06. Similarly, gross profit of the company decreased from Rs 163.75 million in 2005-06 to Rs 119 million in 2006-07, registering a decline of 27 percent.
The officials of PMTF told the committee that the last time the company had purchased eight machines and it was in 1995. They claimed that the organisation had the potential to turn into a profitable entity but it required one-time finance from the government. The meeting was told that PMTF had submitted three PC-1s to the government to bring improvement in the company's performance but no reply had been received so far.
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