June 18, 2008	Wednesday	Jamadi-us-Sani 13, 1429

ISLAMABAD, June 17: The Privatisation Commission has set a $1.8 billion privatisation target for 2008-09, but decided to put on hold “major transactions” during the first quarter because of the prevailing political uncertainty and unfavourable business environment.

Informed sources told Dawn on Tuesday that the new privatisation programme to be put before the PC Board on June 26 for approval did not include transactions of PSO, PPL, OGDCL, SNGPL, SSGC, Kapco, NBP and HBL.

They said the planned GDRs (global depository receipts) of the National Bank of Pakistan and Habib Bank Limited had been put on hold because of negative market sentiments. The share prices of NBP have come down from Rs240 to Rs164 and that of HBL from Rs290 to Rs185.

Since banks’ discount rates have increased and the State Bank is putting more restrictions on banks, the early completion of GDRs of the two banks has become more difficult.

Deutsche Bank, Morgan Stanley and AKD Securities have been appointed financial adviser to disinvest the NBP. The financial adviser for Habib Bank is yet to be appointed.

“Regulatory regimes of oil and gas entities are not strong and they have problems of domination and monopoly,” a source said, adding that the Senate committee on petroleum and natural resources was also opposed to these transactions.

Six other transactions -- Faisalabad Electric Supply Company, Jamshoro Power Company, 10 per cent initial public offering (IPO) of Pakistan Steel Mills Corporation, coal and salt mine companies, Pakistan Machine Tool Factory, Services International Hotel, Printing Corporation of Pakistan and the remaining 62 per cent shares of PTCL -- are also unlikely to be carried out during the first three months of 2008-09.

However, five relatively small entities, including the National Power Construction Company, Heavy Electric Complex, Hazara Phosphate, some units of the Pakistan Tourism Development Corporation and Small and Medium Enterprise (SME) Bank, are expected to be privatised this year.

Other mega transactions such as airports, shipyards and entities of engineering, banking and insurance are also being delayed.Privatisation proceeds worth $400 million have been received and about $600 million is expected to be received by the end of this month.

The sources said the PPP-led coalition government had decided to encourage the Voluntary Separation Scheme (VSS) in various public sector organisations by offering 50 per cent funds so that employees in the privatised units could not sacked for one year.

Proceeds worth $9 billion have been collected from 166 transactions since the start of privatisation process in 1991.