ISLAMABAD: The Privatization Commission (PC) has selected 10 state-owned entities for privatisation within a year. This includes PIA and HBFCL which transactions are expected to be finalised in the first quarter of the current fiscal year (2024-25).
In a statement, the Commission outlined its ambitious timeline:
Pakistan International Airlines (PIA): Privatization expected by August 2024.
House Building Finance Company Limited (HBFCL): Sale targeted for completion by the end of July 2024.
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The privatisation process for Roosevelt Hotel (RHC) in New York City and First Women Bank Limited (FWBL) is also in advanced stages.
The 10 entities which would be privatised within a year are PIACL, RHC, FWBL, HBFC, ZTBL, PECO, SEL, IESCO, FESCO and GEPCO, out of the total of 24 to be privatised.
The Privatization Commission in June 2024 pre-qualified six parties as pre-qualified bidders for participation in the PIACL privatisation process. Buy-side due diligence is underway and bidding for PIACL is targeted during August 2024.
The commission is in the process of finalising terms and conditions of the Share Purchase Agreement with the investor.
Transaction of HBFCL is targeted for completion by end July 2024. Marketing of privatisation of the Roosevelt Hotel will be initiated after approval of the transaction structure by the federal cabinet.
FWBL is currently being pursued under government-to-government mode, pursuant to interest of UAE and subsequent decision of the Cabinet on February 6th, 2024, the transaction will be carried forward as per provisions of the G2G Act.
Power Generation Companies (GENCOs) will be initiated in a phased manner.
The Power Division to consider carving out efficient power plants (Combined Cycle) from GENCOs and privatising only efficient power plants (Combined Cycle) of the four GENCOs, instead of privatizing whole GENCOs as a whole. The obsolete technology-based plants may be disposed of by the Power Division itself.
Once Power Division resolves the associated issues and convey readiness for privatisation, the process of their privatisation will be initiated by PC.
Three options are being deliberated for DISCOS, ie, privatisation, long-term concession and retention. Out of 11 DISCOS, six have been recommended under privatisation mode, three under long-term, while two are to be retained.
The Power Division is in the process of hiring technical consultant for the purpose and would be able to provide timelines. The division is tasked to complete the prior actions in consultation with the technical advisor.
However, the commission will initiate the process of hiring FA upon intimation of Power Division, to conduct the due diligence from a legal, regulatory, policy, technical and HR point of view keeping in view the existing policy and regulatory regime.
Power Division will share a first draft of prior actions by end September 2024.
The Cabinet Committee on Privatisation (CCoP) in its meeting held on 10th May2024 approved in principle 24 entities for privatisation, while 41 entities have been referred to the Cabinet Committee on State-Owned Enterprises (CCoSOEs) for their categorisation as per SOE Act Policy. Those not falling in the category of Strategic Essential SOEs will become part of the privatisation programme as well.
The current government is finalising a phased five years Privatisation Programme (2024-29) including profit-making SOEs with the intention to reduce government presence in commercial space.
Loss-making commercial SOEs shall be privatised on priority and profitable commercial SOEs shall also be identified to reduce the federal footprint in the economy.
Copyright Business Recorder, 2024