Privatisation to begin this year, says minister

Published September 14, 2019
Stalled since the infamous Supreme Court judgment in the Pakistan Steel Mills case, the privatisation process might be set to start again this fiscal year, said Privatisation Minister Mohammadmian Soomro on Friday. — Photo courtesy 24 News YouTube video screengrab
Stalled since the infamous Supreme Court judgment in the Pakistan Steel Mills case, the privatisation process might be set to start again this fiscal year, said Privatisation Minister Mohammadmian Soomro on Friday. — Photo courtesy 24 News YouTube video screengrab

KARACHI: Stalled since the infamous Supreme Court judgment in the Pakistan Steel Mills case, the privatisation process might be set to start again this fiscal year, said Privatisation Minister Mohammadmian Soomro on Friday.

The intention to begin the process this year was shared by the minister during an interactive session with investors and analysts from the financial sector.

He said the government intends to generate revenue through privatisation of state-owned entities (SOEs) to meet large debt servicing obligations of the country.

Secretary Privatisation Commission Rizwan Malik said the government wants active privatisation plan initially for 6 to 7 SOEs while another 10 entities have been included for the next phase.

The most important in this list of initial privatisation are 1,230MW Haveli Bahadur Power Plant and the 1,223MW Balloki Power Plant owned by National Power Parks Company (NPPC).

The meeting was informed that on the prime minister’s directive the privatisation process has been accelerated while capacity building of the Privatisation Commission is also being enhanced.

Many critical questions were raised about the timing of the privatisation and logic behind divestment of profit-making entities. Both the minister and the secretary PC expressed the hope that within 4 to 6 months the economic situation would be improved while the equity market would rebound within this period.

The minister said all economic indications are positive and improvement will be visible during the current financial year.

The secretary PC who spoke most of the time during the session said preparation for the possible transactions of these entities would take at six months. This would be enough time for the expected improvement in the economy to become manifest.

Replying to a question about high interest rates, Malik said this could be a question for domestic investors while the foreign investors have different interest rates. However, he expressed hope that interest rate would come down within this financial year.

He also assured investors that shares of OGDCL and PPL will be sold once conditions in the capital markets improve. He said 7 to 10pc shares of these entities could be privatised; it may be 1pc or 2pc or a block of shares could be sold out and the buyer may get membership in the board.

Published in Dawn, September 14th, 2019

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