Privatisation process of PSM, Heavy Electrical Complex advances

Published November 17, 2020
The Cabinet Committee on Privatisation constituted a committee to improve upon the transaction structure for Pakistan Steel Mills.— Reuters/File
The Cabinet Committee on Privatisation constituted a committee to improve upon the transaction structure for Pakistan Steel Mills.— Reuters/File

ISLAMABAD: The Cabinet Committee on Privatisation (CCoP) on Monday approved the transaction structure for the divestment of 96.6 per cent shares of Heavy Electrical Complex (HEC), and constituted a committee to improve upon the transaction structure for Pakistan Steel Mills (PSM).

Chaired by Adviser to Prime Minister on Finance and Revenue Abdul Hafeez Shaikh, the CCoP also instructed the Ministry of Energy to extend the validity of ‘type testing license’ of HEC.

The committee on PSM will be chaired by Minister for Industries and Production Hammad Azhar and its members include chairman of the Board of Investment, advisers to prime minister on austerity and institutional reforms and energy in consultation with the appointed financial and technical adviser for further incorporation of market requirements.

The CCoP approved the transaction structure for the privatisation of the House Building Finance Company Limited (HBFCL). The decision was already taken in August by the committee, but not ratified by the cabinet for the want of some additional information regarding the profitability and other issues of the entity.

HBFC and 27 govt properties also on the agenda

The Privatisation Commission briefed the CCoP that if the transaction proceeds ahead, the new investor can bring in capital, operational expertise, capacity enhancement of HBFCL and new product development, which would eventually enhance its profitability and market share in housing mortgage for middle and low income groups of the society. The CCoP accepted the proposal for moving ahead with the transaction structure for divestment.

The committee also approved the recommendation of the Privatisation Commission Board (PCB) to authorise the chairman/secretary of the Privatisation Commission to in turn authorise officers of the Commission to open, operate and close accounts in scheduled banks for the execution of privatisation transactions including other operations in compliance with SBP guidelines.

The financial adviser appointed by the Privatisation Commission for the sale of properties owned or controlled by the federal government briefed the CCoP on the bid price for the auctioned properties and sought guidelines for the remaining part of the transactions.

The committee was briefed that out of the 27 properties, the bid price for 23 has been received. CCoP directed the financial adviser to recommend a way forward on two unsold properties in Multan and Rahim Yar Khan. The committee also directed to engage the chief secretaries of Khyber Pakhtunkhwa and Punjab to resolve pending issues relating to two properties in Swat and Lahore.

In order to smoothly conduct the process of privatisation, CCoP approved a model questionnaire that would help in gathering all the relevant information regarding the entity that has been approved for privatisation. The committee also directed that all ministries and divisions and SOEs having assets in the privatisation list will provide information required in the model questionnaire to the Privatisation Commission within 30 days from the date such request reaches the ministry/division/SOE.

The CCoP also constituted a committee to look into various sectoral issues related to the privatisation of National Power Parks Management Company Limited. The committee will include adviser finance and revenue, privatisation minister, secretaries of finance, power and petroleum divisions, special assistant to prime minister on energy and representatives of Nepra as members and will meet within week to deliberate on the way forward. The committee will specify issues and set up guidelines for addressing all the pending issues with relevant quarters.

In order to fully comply with the requirements of section 35 of the Privatisation Commission Ordinance 2000, the CCoP approved the guidelines for all concerned ministries and divisions to ensure that the management of public sector enterprises falling under the domain of the commission runs smoothly.

Published in Dawn, November 17th, 2020

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