ISLAMABAD: The Federal Cabinet has approved financial evaluation of 425MW Nandipur Power Plant (NPP), with a potential of 525 MW, and 747MW Guddu Power Plant (GPP) for subsequent privatisation, well informed sources in Privatisation Commission told Business Recorder.
On December 31, 2021, Privatisation Division briefed the Cabinet Committee on Privatisation about its plans with respect to both the combined cycle power plants and sought to issue necessary direction to Ministry of Energy for obtaining decision of Cabinet Committee on Energy (CCoE) as already decided by CCoP.
Privatisation Division also proposed that in the event of moving forward with privatisation of the GPP and NPB, the concerned ministries may also be directed to take necessary actions to resolve the problems hampering privatisation of these power plants.
The CCoP, while approving the proposal, directed Privatisation Division to continue the process of financial evaluation of Nandipur and Guddu power plants along with their assets.
Meanwhile, the Petroleum Division in consultation with the Power Division and Finance Division shall examine the matter of equity transfer to PSO against its receivables and present the issue before the CCoE in the first place
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However, when the CCoP decision was placed before the Federal Cabinet on January 11, 2022 for ratification, Cabinet Secretary Sardar Ahmad Nawaz Sukhera, who has also served as Secretary Privatisation, suggested that in the case titled ‘Privatisation of Guddu Power Plant & Nandipur Power Plant’, the option of equity transfer to PSO against its receivables may not constitute ‘privatisation’, as it would be a transaction between government entities, and the legal position may be rechecked from the ‘modes of privatisation’ given in the Privatisation Commission Ordinance, 2000.
It was also highlighted that in such a case the evaluation should be done by a third party. Minister for Energy Hammad Azhar and Minister for Finance Shaukat Tarin stressed that the privatisation process should not be stalled and the receivables of PSO could be settled from the proceeds of privatising the two power plants. The decision of CCoP to present the issue to CCoE should; however, be ratified.
After brief discussion, the Cabinet also ratified the decision of CCoP in the case titled ‘Privatisation of Guddu Power Plant & Nandipur Power Plant’ with the stipulation that the financial evaluation of Nandipur and Guddu power plants be carried out subsequent to CCoE’s decision. The Cabinet Secretary also highlighted that large sums of monies were stuck up in court cases regarding earlier privatisation of SOEs, including Schon Group. He suggested that the Prime Minister may review the status of these cases and quantum of monies involved.
Prime Minister Imran Khan directed Privatisation Division to submit the list of defaulting companies, giving details of the cases and their present status.
Copyright Business Recorder, 2022