November 14, 2002	Thursday	Ramazan 8, 1423

ISLAMABAD, Nov 13: The Cabinet Committee on Privatization (CCoP) was informed on Wednesday that preparatory work has been completed for the privatization of PSO, NITL, OGDCL, PTCL, HBL, KESC, and Pak Arab Fertilizer.

PSO, NITL and HBL are at most advanced stages and the pre-bid meeting for PSO transaction has been scheduled for November 15, 2002, the meeting was further told.

The meeting, presided over by Minister for Finance Shaukat Aziz, also directed the Privatization Commission (PC) to work with full commitment so that major transactions could successfully be concluded in the period between November 2002- April 2003.

The meeting also discussed in detail the future calendar of privatization of major state-owned enterprises, which will be taken to market till April 2003.

The CCoP was informed that major transaction takes 12 to 18 months for preparatory work before it can be taken to the market.

The privatization programme was moving ahead with full tempo, taking 82 transactions to market in the last 3 years earning Rs36.2 billion.

The CCoP appreciated the strenuous preparatory work that Privatization Commission has to undertake before an entity or a business concern can be offered for sale to the prospective investors. The process starts with the identification of the entity to be privatized. A Financial Adviser (FA) is then selected and appointed to submit the technical and financial proposals for making the entity saleable and propose a transaction structure for approval. Their job also includes removal of legal encumbrances and restructuring of the entities.

The Financial Adviser for this purpose carries out in-depth due diligence before submitting recommendations. Enactment of a regulatory framework, where not in place, is done and sectoral reforms to ensure a level playing field and competitive framework in the post privatization period are carried out. The next important step is valuation of property/assets, which serves as the benchmark, or indication of a fair value. Interested parties are then called to pre-bid meetings where the issues they raise are clarified. Bidding is the last stage after which a legal contract is entered into with the successful bidder regarding payments, handing over of the assets, etc.

The CCoP noted that the pipeline of privatization was almost empty when this government took over. Minister for Privatization Altaf M. Saleem and his team had done commendable job in bringing all these important transactions to maturity going through all steps indicated above in a short period.

The CCoP approved the package for recovery of balance sale price for certain privatized enterprises. The Committee also approved sale of shares of Kohat Cement and DG Khan Cement companies through stock markets. It gave go ahead for the privatization plan of ICP SEMF in continuation of Lot-A & B of ICP Mutual Fund and noted with satisfaction that the first pre-bid meeting with the prospective bidders for PSO was being held on Nov 15, 2002 and pre-bid meeting for ICP (SEMF) on November 16, 2002. The CCoP was informed that to broad-base ownership of shares and to provide depth to the stock markets, the government had divested shares of MCB and POL worth Rs800 million through stock market.

The meeting was attended by the federal ministers for industries, production & commerce, labour and manpower, privatization, deputy chairman, Planning Commission, chairman BOI and other senior officers of Ministries and Divisions concerned.