ISLAMABAD: After receiving statements of qualification (SOQs) from three parties for the sale of two power plants worth $2 billion, the government on Tuesday delisted five properties from its privatisation programme.
The decision to delist five properties from the privatisation programme was taken at a meeting of the Cabinet Committee on Privatisation (CCOP) presided over by Adviser to the Prime Minister on Finance & Revenue Dr Abdul Hafeez Shaikh.
The single-point meeting of the CCOP also decided to hand over three of the five delisted properties to Naya Pakistan Housing Authority for construction of low-cost housing units and to offer them to the general public.
The two other properties were found to be problematic as their titles were not clear and had been pledged against commercial loans. The relevant ministries were directed to identify two alternate properties with clear titles and transfer them to the Privatisation Commission for sale.
CCOP meeting decides to hand over three of five delisted properties to Naya Pakistan Housing Authority
It was reported that a property belonging to Federal Board of Revenue (FBR) in Lahore had already been taken over by the Lahore Development Authority (LDA) while a plot of Pakistan Post in Islamabad’s F-15 had been claimed by the Capital Development Authority (CDA).
The properties that were removed from the privatisation list included an 18.8 Kanal plot of Pakistan Post in F-15, Islamabad, followed by two major properties belonging to Radio Pakistan, including a 841.6 kanal commercial/agricultural land at Multan Road, Lahore and 928 Kanal commercial land at Pipri, Karachi.
Likewise, two properties of FBR, including an IRS Colony of four kanals in Lahore and a 50-acre land at Hawksbay Road, Mauripur, Karachi were also removed from the sale list.
The meeting also took up a non-agenda item for an update on privatisation of two Liquefied Natural Gas (LNG) based power plants in Punjab.
The meeting was informed that three SOQs had been received so far. The deadline for submission of SOQs is Jan 17. These applications belonged to investors from Malaysia, Thailand and Japan.
The government was expecting strong response from investors from some other countries, like China, Qatar, Saudi Arabia and the United Arab Emirates. None of them had come forward so far but applications from China, Qatar and the UAE could not be ruled out by the deadline, informed sources said, adding Saudi Arabia was unlikely to participate after its desire for a government-to-government deal could not be entertained due to laws governing the privatisation programme.
Officials said a total of 19, including 14 foreign companies, had purchased documents by Dec 23, 2019 deadline under the advertisement given by the government inviting expressions of interest (EOIs). As only one bidder submitted the SOQ by Dec 23, the Privatisation Commission had to extend the deadline to Jan 17, 2020. The government had arranged road shows abroad during Dec 14-18 period for marketing of the power plants.
The government has set a deadline of completing privatisation of two LNG power plants belonging to National Power Parks Management Limited in the third quarter of FY2019-20, according to a statement given to the National Assembly last month.
However, it has now given an undertaking to the International Monetary Fund (IMF) under a structural benchmark to have advanced privatisation of these two plants at Balloki and Haveli Bahadur Shah to finalise the process by end-FY 2020.
Officials said that the authorities were targeting to hold bidding for the two plants before end-March this year and windup the transactions before the close of fiscal year on June 30, 2020. The government has budgeted an amount of Rs150bn to come from privatisation during the current fiscal year. The government is anticipating at least Rs500bn revenue shortfall against its budgeted target of Rs5.555 trillion.
The two power plants envisage about 16pc dollar based internal return on equity under a tariff approved by the National Electric Power Regulatory Authority (Nepra) at debt-equity ratio of 70-30.
Published in Dawn, January 15th, 2020