A meeting of the Cabinet Committee on Privatization (CCoP) on Friday directed Privatization Commission to expedite the privatization process of Small Medium Enterprises (SME) Bank and Pakistan International Airline (PIA)-Investment Limited.
Advisor on Finance Dr Abdul Hafeez Shaikh, who chaired the CCoP meeting, approved the transaction structure of the SME Bank after it was informed that transaction structure has been reviewed and recommended by a transaction committee constituted by the Privatization Commission with members from PC Board, Finance Division, State Bank of Pakistan and SME Bank.
The meeting was informed that the committee held four meetings before placing the transaction structure before the CCoP for consideration and approval. The meeting was also informed about the pre-qualification criteria reviewed and approved by the PC Board for the prospective bidders.
The CCoP meeting also discussed privatization of PIA-Investment Limited and approved a proposal with regard to constitution of a task force for early completion of formalities to sell the PIA properties including Roosevelt Hotel in New York and Hotel Scribe in Paris.
The CCoP decided that the task force would be headed by Minister for Privatization Commission Muhammad Mian Soomro and members would include Special Assistant to Prime Minister on Overseas Pakistanis Zulfiqar Abbas Bukhari, secretary PC and additional secretary finance as well as legal and financial consultants on the Roosevelt Hotel Corp and any other official, if necessary, to be considered by the task force.
The CCoP also directed the PIA management to also present the findings of a feasibility study conducted by it in pursuance of a CCoP decision. The CCoP also directed the PIA management to update the committee on a monthly basis regarding the progress of the work and also advised the airline management to carry out its plan in coordination with Aviation Division.
The CCoP rejected the request of Earthquake Reconstruction and Rehabilitation Authority (ERRA) with regard to delisting of its 17 properties from 32 assets being processed for sale by Privatization Commission. However, it considered delisting of ERRA properties till June 2020 when it would be included in the National Disaster Management Authority (NDMA).
The EERA was of the view that deferring the privatization of its assets till June 2020 would provide it adequate time for a possible legislation for incorporating these properties into the National Disaster Management Fund (NDMF).
The Privatization Commission told the CCoP that 17 properties of EERA have been picked up for privatization in pursuance of a federal cabinet's decision of March 2019. An inter-ministerial committee was constituted by the Prime Minister for 32 properties belonging to nine ministries, divisions and organizations, which themselves had proposed these properties for sale to the Privatization Commission.
The PC also submitted that it has already hired a financial adviser for the sale of these 32 properties and withdrawal of properties as being proposed by the EERA would adversely affect the whole privatization process, besides sending negative signals to potential buyers and investors.
The Commerce Division's proposed delisting from privatization of a 15-acre plot situated in an industrial area in Multan on grounds that the same plot could be utilized more efficiently for some other purpose. The CCoP decided that the privatization of the asset in question would go ahead as already decided by the government.
However, a committee headed by Abdul Razak Dawood, adviser on commerce, would scrutinize the reference price at the bidding stage to see and ensure it matches the real value of the plot. And if the price does not matches the real value, the Commerce Ministry would come up with an elaborate alternative plan detailing various aspects of the opportunity cost to use the plot, lying idle since 2011, quickly and efficiently.
Copyright Business Recorder, 2019