Will not privatise PIA, Steel Mills, says govt

Updated October 31, 2018

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Pakistan International Airlines is causing operational losses worth Rs2 billion per month to the national exchequer in addition to the liabilities of Rs400bn.
Pakistan International Airlines is causing operational losses worth Rs2 billion per month to the national exchequer in addition to the liabilities of Rs400bn.

ISLAMABAD: In its first meeting under the PTI-led government, the Board of Privatisation Commission on Tuesday decided to slash the list of entities on the privatisation agenda — including Pakistan International Airlines (PIA) and Pakistan Steel Mills (PSM) — set by the previous government.

The final list of 34 public sector entities — excluding the national flag carrier, Steel Mills and some other state-owned entities (SOEs) — would be presented to the Cabinet Committee on Privatisation (CCOP) on Wednesday (today).

Sources privy to the board meeting told Dawn that the meeting — presided by Chairman Privatisation Commission Mohammad Mian Soomro — conducted a thorough review of the privatisation programme and finalised the list.

According to sources, the government has decided to exclude PIA, PSM, Pakistan Railways and power distribution companies from the privatisation agenda.

The government will begin the privatisation programme with small entities including small and medium enterprises (SMEs), First Women Bank and National Insurance Company.

Meanwhile, a retired official of Pakistan Air Force has been appointed as the new head of PIA in a bid to regain the glory of national flag carrier. The government may also come up with a new plan for Steel Mills.

The government plans to start privatization of 11 entities on short-term, 12 entities on medium-term and remaining 11 on long-term basis before the end of its tenure.

The PML-N government had decided to restructure PIA, followed by divestment of 26 per cent of government equity stakes to strategic partner with management control. While in the case of Pakistan Steel, the decision was divestment with management control.

The issue of Roosevelt Hotel in New York came up for discussion. However no firm proposal for privatization was considered.

According to sources, the issue of outstanding payment of $800 million by the management of Etisalat of the United Arab Emirates against the divestment of 26pc government share in PTCL also came under review during the board meeting.

The meeting was informed that 95pc properties have been transferred in the name of PTCL. Despite meeting this demand of the UAE telecom company, the outstanding amount has yet to be paid.

Since Pakistan is facing serious financial crunch, Prime Minister Imran Khan may be asked to take up the matter at the highest level to resolve the issue, sources added.

An official statement released after the board meeting said the list of active privatization programme was finalized after consulting all relevant ministries and due consideration was given to the feedback provided by them. The board members gave their suggestions to include and exclude SOEs for the next privatisation programme.

Mr Soomro directed for the recovery of outstanding dues receivable from the buyers of SOEs that were privatized in the 1990s. It must be recalled that approximately Rs3.9bn are yet to be received from defaulter buyers of various SOEs.

The chairman also directed to fix responsibility and approach all relevant investigative bodies to reach the truth and rectify the problem.

Meanwhile, the government has reconstituted CCOP, with Minister for Finance Asad Umar as chairman.

Published in Dawn, October 31st, 2018