ISLAMABAD, June 29: The privatisation of the Pakistan Petroleum Limited and the two Sui gas utilities has been put on the back burner because of ‘some unsettled issues’ on their transaction structure and tariff, Privatisation Minister Zahid Hamid has said.
The minister told reporters at a briefing that the three gas firms had not been taken off the privatisation list but there were certain issues to be settled before their sale. He expressed the hope that the units would be prepared for privatisation during the 2006-7 financial year.
The privatisation of the PPL was the top priority of the Privatisation Commission as the prime minister had directed it about two months ago to complete the sale of Pakistan State Oil and the PPL before June 30. The PSO’s privatization has also moved into the next fiscal year but remains on the priority list.
The minister said the privatisation of the Sui Southern Gas Company and the Sui Northern Gas Pipelines was expected to be completed during 2006-7.
Mr Hamid said the Supreme Court’s judgment over Pakistan Steel Mills privatisation would not affect other transactions.
He said management transfer of the National Investment Trust and sale of the Lasbela Textile’s machinery, Lyallpur Chemical and Fertilizer Company and the PSO were on the advanced stage for the next financial year.
He said the date for the sale of the PSO would be announced soon with that of the Services Hotel land in Lahore.
He said the 10-15 per cent disinvestment of the Oil and Gas Development Company through issue of global depository receipts in London and New York and secondary public offerings in domestic market would hopefully be completed by September.
Some other transactions that he said would be completed in 2006-7, included secondary public offering of government shares in the United Bank, initial public offerings of the State Life Insurance Corporation, secondary public offering of the Kot Addu Power Company and privatisation of the Heavy Mechanical Complex, Heavy Electrical Complex and the Pakistan Machine Tool Factory.
Responding to a question, the minister said the financial advisers of Pakistan Steel Mills, led by Citibank Group and Ferguson, would not be given full payment of privatisation fee, that comprised a lump sum transaction fee and a success fee.
He said the Privatization Commission had invited the consortium of financial advisers to hold negotiations on the subject.
He said the success fee could not be paid to the financial advisers after the Supreme Court judgment as the transaction did not materialise.
He parried questions about the amount paid by the commission to lawyers to defend the privatisation of Pakistan Steel Mills but said exaggerated figures were being quoted.
He said the government would decide whether to file a review petition after receiving the detailed judgment.
He said the Council of Common Interests would soon be formed and the matter would be discussed there.
Mr Hamid vowed to continue the privatisation programme vigorously.
In reply to a question, he said that since 1991, 159 sales valuing Rs374 billion had materialised, of which 85 per cent had been completed during the past seven years.
He said foreign direct investment had increased from $322 million in 1999 to $3.5 billion in 2005-6, which included privatisation proceeds of $1.5 billion.
He said the Supreme Court judgment did not question the privatisation law, procedure and rules.
