ISLAMABAD: The Senate Standing Committee on Privatisation has raised questions on the approval process for the auction of the old chancery building in Washington DC, and sought a report from the foreign ministry.
At a meeting on Tuesday, the committee expressed concerns about the approval of the chancery building without the consent and intervention of the Privatisation Commission.
Further concerns were raised when a senior official of the Ministry of Foreign Affairs informed the committee that the decision to sell the building was taken during a meeting in which representatives of the Ministry of Finance and the Privatisation Commission were present.
However, the privatisation secretary denied that the commission was made part of the approval process at any stage.
A foreign ministry official told the committee that the old chancery building was sold to Abdul Hafeez Khan, a Pakistani-American who offered the highest bid of $7.1 million.
Official says $7m loan was taken for its renovation, but a ministerial committee later approved its sale
He said that the cabinet considered the summary moved by the foreign ministry and approved the recommendations of an Inter-Ministerial Committee (IMC) to sell one of the buildings.
“The building was from the 1980s and a very old one,” he said. He further informed the committee that a loan of $7m had already been taken for its renovation, but the IMC later decided to sell the property.
Convention centre
Deliberating the privatisation of the Jinnah Convention Centre in Islamabad, the committee was briefed by an additional secretary from the interior ministry. He stated that the privatisation of the convention centre was not an attractive option unless there was a structured alternative plan ready for the purpose.
He said that the convention centre was an expensive property to maintain and a plan should be framed in a way that it is economically viable and the government has to bear no further cost.
When asked by the committee chairman whether or not the ministry wants to privatise the convention centre, the official said that a meeting had been arranged with the Capital Development Authority on the essentials of the transaction structure.
Etisalat payment
The committee also took up the matter of an outstanding payment of $800m by Etisalat against the privatisation of PTCL, and was informed that as per the sale purchase agreement (SPA), Etisalat made an upfront payment of $1.4 billion in April 2006 against the total bid amount of $2.59bn, whereas, the balance payment of $1.2bn was to be paid in nine biannual installments.
The committee was told that Etisalat paid the initial three installments, totaling $400m, and has not made any further payments since January 2008, and therefore a balance amount of $800m is still pending. The body was informed that the privatisation commission held various meetings for an early resolution of the issue and and efforts were underway to reach an amicable solution.
The committee was also briefed on the privatisation of distribution companies (Discos) following the constitution of a 13-member committee by the prime minister to transfer these to the provinces.
Since the subject matter falls within the purview of the Council of Common Interests (CCI), its approval has to be obtained to transfer ownership of the Discos to the provincial governments.
Published in Dawn, July 19th, 2023
