November 18, 2006	Saturday	Shawwal 25, 1427

ISLAMABAD, Nov 17: The ministry of finance has agreed to pay about Rs8 billion that various government departments and agencies owe Pakistan State Oil (PSO) to clear the way for privatising the company by June 2007 "positively".

This amount, outstanding for many years, was said to be a major hurdle in government’s off-loading of its oil assets.

Sources in the ministries of finance and privatisation told Dawn on Friday that the government had decided to sort out various issues concerning PSO, including paying off its financial liability amounting to around Rs8 billion that had blocked its disinvestment many times in the past. All the four pre-qualified bidders had been expressing their concern over it and wanted the government to absorb all the financial liabilities of the PSO before its privatisation. These bidders were: Al-Ghurair of Saudi Arabia, consortium of Al-Noor and Al-Jumaria of Kuwait, Abu-Dhabi Group and Dewan Mushtaq Group.

Their due diligence had already been completed. However, four more local companies are believed to have contacted the commission for taking part in disinvestment process of the PSO.

When contacted Minister for Privatisation and Investment Zahid Hamid confirmed that the issue of receivables of the PSO was likely to be resolved soon after the government gave a commitment to pay Rs7-8 billion on behalf of various organisations and bodies.

"Now things certainly look very clear to disinvest the ‘mighty’ PSO within this current financial year," he said adding that no further delay will be allowed so as to complete the transaction on schedule.

Responding to a question he dispelled the impression that the privatisation process had slowed down, which needed to be accelerated.

"This is a wrong perception and on the contrary privatisation of various state sector entities have, in fact, been expedited," he said adding that the total sale proceeds of the privatisation, which remained $1.5 billion in 2005-06, were expected to be much higher in 2006-07. "A very substantial amount will come in the government treasury before the end of this financial year," he asserted.

Giving details the minister said three transactions--Pak American Fertilizer, Jawedan Cement and machinery of Lasbela Textile Mills--had been privatised during the first quarter of 2006-07 that brought a total of Rs20.156 billion, Rs16 billion, Rs4 billion and Rs156 million, respectively.

"And now the government is expecting over $1 billion through the GDRs of the Oil and Gas Development Company Limited (OGDCL) whose 15 per cent shares had been launched recently,” he said.

He said Lyalpur Fertiliser Company and Hazara Fertiliser Company along with a number of hotels and motels of the PTDC will be privatised within this financial year. This also included Malum Jabba hotel in the Northern Areas.

Similarly, the minister for privatisation and investment said that Jamshoro Power Company and two distribution companies of Wapda-- Faisalabad Electric and Peshawar Electric Company--will be disinvested before the end of 2006-07. Issues concerning tariffs of these distribution companies were being sorted out, he added.

"We will be then all set to offer GDRs of National Bank of Pakistan (NBP), United Bank Limited (UBL) and Kot Addu Power Company (Kapco) within this financial year," he said adding that the government still have considerable shares in these organisations.

He said that the Initial Public Offering (IPO) of Habib Bank Limited (UBL) has also been planned during 2006-07.

Mr Zahid Hamid said that coal and salt mines of Pakistan Mineral Development Corporation (PMDC) will also be privatised within this current financial year.

The minister for privatisation and investment said that bigger transactions like PNSC and CAA will also be taken up soon once some of their problems were sorted out.

To a question, he said that the Privatisation Commission will soon be appointing an analyst to evaluate the performance of various state sector units that had been privatised in the past. The objective, he said, was to strengthen the post privatisation of various disinvested public sector utilities.