It is unclear whether the government can realistically earmark any amount as privatization proceeds in the budget for 2018-19 but the amount would be much less than Rs 50 billion budgeted for the current year as it is an election year, sources in the Privatization Commission (PC) told this correspondent.
No Privatization Commi-ssion's board meeting has been held during the last four months and no pre-budget meeting of PC board has been convened to discuss the budgetary target for financial year 2018-19, a senior official of PC Board told Business Recorder.
The IMF in its latest post programme monitoring (PPM) report uploaded on its website on March 19, 2018 maintained that privatisation and restructuring of key loss-making Public Sector Enterprises (PSEs) have been largely on hold; and assessed the combined accumulated losses of PSEs (including PIA, Pak Steel Mills, power sector) exceeding Rs1.2 trillion (4 percent of GDP) which could eventually lead to sizable demand of budgetary resources.
There are 14 cases of recovery of outstanding dues from various private parties at various stages of litigation including (i) $800 million due from Dubai-based Etisalat group pending with the PC; and (ii) Schon Group purchased National Fibers Limited, Pak-China Fertilizers Limited and Quaidabad Woolen Mills for Rs1.3 billion and still owes Rs319.3 million to the government of Pakistan.
The remaining 12 include Pak PVC Limited, Sindh Alkalis Limited, National Motors Limited, Balochistan Wheels Limited, Dandot Works of National Cement Limited, Haripur Vegetable Oil Processing Industries, Crescent Factories Vegetable Ghee Mills, Siranwali Rice Mills, Dhaunkal Rice Mills and Mubarakpur Rice Mills Limited.
Privatization Commission has yet to appoint financial advisors for the divestment of government's shares in SME Bank and Mari Petroleum Company Limited. In January 2017, the Cabinet Committee on Privatisation (CCoP) had approved divestment of 18.3 percent government shareholding in MPCL either through joint-ventures with Fauji Foundation and OGDC or the domestic stock exchange. In the same meeting transaction structure for the privatisation of SME Bank was also approved.
Entities which are hemorrhaging the economy include Pakistan Steel Mills (PSM), Pakistan International Airlines (PIA) and power sector entities. This is a digression from the PML-N manifesto 2013 which states that as several key state owned enterprises like PIA, Railways, PSM, WAPDA and others institutions are a major drag on Pakistan's economy they would be restructured/privatized.
Unlike previous regimes, only profitable entities were privatized during the current tenure of the PML-N administration through offering government shares in the capital market. The government sold 20 per cent shares of the United Bank Limited (UBL) at Rs 38.2 billion, 5 percent shares of the Pakistan Petroleum Limited (PPL) at Rs 15.34 billion, 11.46 percent shares of the Allied Bank Limited (ABL) at Rs 14.44billion, 41.5percent shares of the Habib Bank Limited (HBL) at Rs 102.34 billion and 88 percent shares of the National Power Construction Corporation (NPCC) at Rs 2.5 billion.