ISLAMABAD: Prime Minister Imran Khan on Friday reviewed the pace of privatisation while pointing out that increasing non-tax revenue is one of government’s top priorities.
He said that privatisation’s objective is to not only save losses to the national exchequer but hand over the responsibility of these state-owned entities to capable hands so that their potential could be harnessed.
He said the government does not want to get rid of loss-bearing entities by just privatising them. Saving the national exchequer from losses and running these institutions according to their potential for achieving better results and their contribution to the national economy is the main reason for privatisation, he added.
He said that an early completion of the privatisation process will lead to an increase in government’s non-tax revenue, which will allow undertaking projects of public welfare in health, education and other services.
He asked the PC secretary to complete the privatisation process of all listed entities within the timeframe.
Privatisation Secretary Rizwan Malik informed the PM that privatisation of a number of state-owned entities worth billions of rupees including Haveli Bahadur Shah Power Plant, Balloki Power Plant, SME Bank, Services International Hotel, Lahore, and Jinnah Convention Centre were in final stages.
PM was further informed that the process of privatisation of Guddu Power Plant, Nandipur Power Plant, First Women Bank Ltd, Pakistan Petroleum Ltd and State Life Insurance has also been started.
Cabinet approves plans to privatise SME Bank, PIA Investment
Moreover, the Cabinet Committee on Privatisation (CCoP) at its meeting on Friday approved transaction structure for the privatisation of SME Bank Ltd and asked the Privatisation Commission (PC) to expedite pace of work to privatise the PIA Investment Ltd, besides turning down a proposal of the Earthquake Reconstruction and Rehabilitation Authority (EERA) to defer sale of its properties.
The CCoP, chaired by Commerce Adviser Abdul Hafeez Shaikh, was told by the PC that transaction structure was reviewed by committee comprising the PC board members, officials from the finance ministry, State Bank of Pakistan and SME Bank.
The cabinet committee also discussed the privatisation of PIA Investment Ltd. and approved a proposal for the constitution of a task force to examine and process all necessary formalities for an early disposal of the PIA properties, including the Roosevelt Hotel in New York and Hotel Scribe in Paris.
It was decided that the task force will be led by Minister for Privatisation Muhammad Mian Soomro and include Special Assistant to PM on Overseas Pakistanis Zulfiqar Bukhari, PC secretary and additional secretary of the Ministry of Finance.
The CCoP directed the PIA management to submit updates regarding the privatisation process on a monthly basis and advised it to carry out its plan in coordination with the Aviation Division.
On the other hand, the CCoP turned down a proposal submitted by the EERA to defer sale of its 17 properties out of 32 assets currently being processed by the PC until June 2020 when it would be subsumed into the National Disaster Management Commission as per a government decision already taken to transform the National Disaster Management Authority (NDMA) into self-sufficient entity.
The EERA was of the view that deferring the privatisation of its assets till June 2020 would allow sufficient time for a possible legislation for incorporating these properties into the National Disaster Management Fund.
The PC also informed the meeting that the EERA’s 17 properties have also been selected for privatisation in pursuance of a federal cabinet decision taken in March.
Moreover, the PC said that nine ministries, divisions and organisations also forwarded relevant authority letters to the PC for further processing of 32 properties identified by an inter-ministerial committee constituted by the PM.
The PC said it had already hired a financial adviser and withdrawal of properties as proposed by the EERA would adversely affect the process besides sending negative signals to potential buyers and investors.
The CCoP, after discussing the issue in detail, advised the authority to complete all codal formalities still pending at its end to let the privatisation process move ahead.
To another proposal presented by the Ministry of Commerce for delisting a plot from the privatisation list on the grounds that it could be utilised efficiently rather than being sold at low price, the CCoP said the privatisation of the plot would go ahead as decided. However, it said a committee would closely scrutinise the bidding process for the sale of the plot.
Published in Dawn, November 16th, 2019