Privatisation Commission has reportedly obtained nod of Special Assistant to Prime Minister on Energy, Nadeem Babar for inclusion of OGDCL and PPL in active privatisation list instead of waiting for input from Minister for Power and Petroleum, Omar Ayub and Secretary Petroleum, Mian Asad Haya ud-Din, who were abroad for a few days, well informed sources told Business Recorder.
Commerce Division, sources said, has also opposed inclusion of profit making Pakistan Re-Insurance Company Limited (PAkRE), in the active privatisation list.
Giving the background, the sources said, Secretary, Privatisation Commission informed the Board members about the meeting of the Cabinet Committee on Privatisation (CCoP) held on August 8, 2019 wherein CCoP directed the PC to select ten Public Sector Companies (PSEs) from the privatisation list approved by the CCoP meeting on October 31, 2018 for sell off and initiate the process of hiring of Financial Advisors (FAs), collectively or separately as per legal requirements, for selected PSEs and submit a compliance report to the CCoP in the next meeting.
The Federal Cabinet ratified the decision of the CCoP on August, 20, 2019. It was apprised that in pursuance of the direction concerned Ministries and Divisions were consulted for identification of 10 PSEs for inclusion in the active privatisation program. Accordingly, following PSEs were identified for inclusion in the active privatisation program: (i) Pakistan Engineering Company (PECO), sale of 33.25 residual shares- Ministry of industries and Production recommended PECO for privatisation in principle, highlighted certain issues like advances and liabilities etc. However, it was decided that such issues would be handled by Financial Advisor in due course of time once the transaction was initiated for privatisation ;(ii) Heavy Electrical Complex (HEC) - representative of MoI&P recommended to initiate the process of hiring of FA for privatisation of HEC;(iii) Sindh Engineering Limited (SEL) - the entity has valuable properties, due to which its privatisation is being initiated. It was decided that issues, if any would be handled by Financial Advisor in due course of time once the transaction is initiated for privatisation ;(iv) First Women Bank Limited (FWBL) strategic sale- representatives of Finance Division were informed by the Secretary PC that EoI for hiring of FA is being published shortly to initiate the process of privatisation of FWBL, as it is already on active privatisation program list and PC will do its best to retain the basic feature/ charter of the bank during the process;(v) House Building Finance Corporation Company Limited (HBFCL) strategic sale- Ministry of Finance recommended HBFCL for inclusion in the active privatisation program list and supported publishing of EoI for hiring of FA;(vi) Pakistan Re-Insurance Company Limited(PAkRE), divestment of up to 20 per cent share through stock exchange - Ministry of Commerce representative expressed reservations for privatisation of PaKRe). In response, Secretary PC explained the directions of the CCoP, wherein PC has been authorised to pick up entities listed in new privatisation program approved by the CCoP on October 31, 2018 for inclusion in active privatisation list to initiate process of its privatisation by publishing EoI for hiring FA. Moreover, PakRe is a listed company and PC intends to divest its shares for enhancing private sector participation in the insurance sector. It was further stated that the strategic stake of the Government of Pakistan directly/ indirectly would not be affected during the process;( vii) Oil and Gas Development Company Limited (OGDCL) - Chairman informed the participants that Minister for Energy and Secretary Petroleum were contacted for their consent but it was informed by their office that both of them are abroad. However, Nadeem Babar, Special Assistant to the Prime Minister on Petroleum, supported the proposed divestment of OGDCL and PPL. OGDCL representative supported the divestment of OGDCL shares in line with the Government of Pakistan's directions. Moreover, 10 per cent shares were parked with PC in2014 for divestment. It was decided that GoP may divest up to 7 per cent shares of OGDCL through local listing and international and domestic offering ;(viii) Pakistan Petroleum Limited (PPL)- after detailed discussion on restructuring and divestment of PPL shares it was agreed that GoP may divest up to 10 per cent shares of PPL through block sale to strategic investor;( ix) Nandipur Power Plant ( 425 MW)- Power Division representative explained that Nandipur power Plant is a part of Genco-III as it was established before 2010, approved from CCI for its privatisation is not required. It is fully operational and a good choice for privatisation ;(x) Guddu Power Plant (747 MW)- Power Division representative explained informed that Guddu Power Plant is also part of Genco-II and is running in profit, hence its' a good choice for privatisation. It was further stated that approval from CCI for its privatisation is not required and ;(xi) Kot Addu Power Plant Company (Kapco)- Power Division representative informed that Kapco may not be considered for divestment of its residual shares, as its Power Purchase Agreement (PPA) will expire in 2020-21 and its extension is dependent upon future business plan of the company. However, a meet in this regard is being held shortly with Kapco management. Outcome of the meeting will be shared with the PC.
On September 18, 2019, CCoP approved inclusion of ten entities in the active privatisation list which is yet to be submitted for federal cabinet approval.
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