ISLAMABAD: The government has assured the International Monetary Fund (IMF) that it will privatise 10 public sector enterprises in 2016 and transaction of four entities will be completed by June.
According to the timeline of the privatisation plan, transaction of State Life Insurance Company (Slic), Kot Addu Power Company (Kapco), Pakistan International Airlines (PIA) and Mari Petroleum Ltd will be completed by the end of June.
The government has planned to sell 10-15 per cent of Slic shares, 40.25pc government shares in Kapco, 26pc shares of PIA and 18.39pc government shares in Mari Petroleum.
The strategic and asset sale of Pakistan Steel Mills has been planned to be completed by the end of September. Likewise, the strategic and asset sale of Faisalabad Electric Supply Company (Fesco) will be completed by end-September.
The strategic and asset sale of Northern Power Generation Company Ltd and Jamshoro Power Generation Company Ltd will be completed by the end of December.
The government has succeeded in completing the transactions of UBL, PPL, ABL, HBL and the National Power Construction Company (NPCC). The proceeds raised so far by the government amounted to $1.715 billion which includes $1.124bn in foreign exchange.
Transaction of four entities will be completed by June
The government has informed the IMF that the privatisation programme has experienced some delays as a result of which the number of transactions planned for the next 12 months has increased.
Meanwhile, the government is unclear about the privatisation of Pakistan Railways. The authorities concerned believe that through rationalisation of tariff and expenditures and improved occupancy rates, Pakistan Railways has been able to improve its revenue for the past two years, and this trend continues with an increase of around 20 per cent in the first quarter of the current fiscal year. The railways’ revenue improved in 2013-14 and 2014-15 by 32pc and 45pc, respectively.
Railways Minister Saad Rafiq is not in favour of privatising Pakistan Railways and he often speaks against it.
On the other hand, IMF Mission Chief for Pakistan Harold Finger in his recent interaction with journalists, observed that failing to restructure or privatise the loss-making enterprises would mean taking public resources away from priority spending. “There is a need to realise that strategic privatisation is a complex process that needs to be done right,” he said.
In the case of PIA and Pakistan Steel, IMF is now observing both the cases. “This is not just the experience in Pakistan, but something we observe across our membership.”
He expressed the hope that a consensus would be found in parliament regarding the next steps with respect to PIA.
The IMF, he added, would discuss with Pakistani authorities their intentions and plans during the review talks planned for Dubai later this month.
About the Steel Mills, he was hopeful that the government’s discussions with the Sindh government would come to some conclusion one way or the other and that the process could move forward once that decision had been taken.
Published in Dawn, January 17th, 2016