The budgeted Rs 50 billion from privatisation proceeds in 2016-17 are unlikely to be realised as the process for sale of ailing Public Sector Entities (PSEs) have been put on hold due to political opposition and widespread labour unrest, informed sources told Business Recorder. This situation is not unique, sources said, as even in 2015-16 the government''s budgeted Rs 50 billion from privatisation proceeds were revised downward to Rs 13.6 billion. In 2015-16 the government succeeded in only privatising National Power Construction Corporation (NPCC) for Rs 2.5 billion and failed to complete privatisation of many PSEs due to strong opposition from political parties as well as labour unions, sources maintained.
The privatisation of Pakistan International Airlines (PIA), Pakistan Steel Mills (PSM), Faisalabad Electric Supply Company (Fesco), Lahore Electricity Supply Company (Lesco) and Islamabad Electricity Supply Company (Iesco) could also not take place as had been committed with the IMF under the ongoing Extended Fund Facility. Sources maintained that PIA and PSM privatisation would progress in 2016-17.
The parliament, in a joint sitting, had unanimously approved the Pakistan International Airlines Corporation Conversion Act on April 11, 2016, which has converted PIA into a public limited company. "We will re-advertise for Financial Advisor (FA) for the privatisation of PIA after it has been converted into public limited company," sources added.
The Cabinet Committee on Privatisation (CCoP) is also likely to seek Sindh government''s intent to purchase PSM before Eid and in the event that Sindh declines the committee will give the go-ahead to commence the procedure for privatisation of this entity. The deadline given to Sindh expired on June 10. However plans to privatise the power distribution companies (Discos) have been put on the backburner since January 2016 after authorities were unable to complete the bidding process for FESCO by June 2016, sources maintained. "We are in the process of revisiting our strategy for DISCOs and we will continue to engage with key stakeholders to build a consensus," they maintained.
Privatisation of Northern Power Generation Company Limited (NPGCL), Jamshoro Power Generation Company Limited (JPCL), Lakhra Power Generation Company Limited (LPGCL) and Central Power Generation Company Limited (CPGCL), Kot Addu Power Company (KAPCO) and Small & Medium Enterprise (SME) Bank are in the pipeline. Sources further revealed that the impact of Brexit on global financial markets and especially within Pakistan will be discussed in the next board meeting of the Privatisation Commission. The government generated Rs 177 billion through privatisation during 2014-15. When contacted, Sardar Ahmad Nawaz Sukhera, Secretary Privatisation Commission avoided comments.