ISLAMABAD, May 4: The post-privatization issues like regulations and tariffs of utilities were impeding the strategic sale of mega state-run entities.

"There are issues of post-privatization regulations and tariff of the utilities," said Privatization Minister Dr Abdul Hafeez Sheikh when asked what was the reason hindering the strategic sales of mega entities like Pakistan Telecommunication Company Limited, Pakistan State Oil and power companies.

The minister was talking to reporters after the sale of Kohinoor Oil Mills Limited (KOML) that fetched the highest offer of Rs80.715 million from Iqbal Khan of Bara Ghee Mills in an open bidding here on Tuesday.

He said the Privatization Commission was striving to resolve various issues, including post-privatization tariff and regulation issues of mega units like PSO, PTCL and KESC.

Asked whether the defence ministry still had objections over the sale of PSO, the minister said: "We are working with various departments of the government to remove hurdles if any in the way of strategic sale of mega entities and make them ready for privatization."

He said it had been decided not to give any issue any public statement at least about PSO because of the market sensitivity. Earlier, five parties who deposited earnest money participated in the open bidding for the privatization of Kohinoor Oil Mills Limited through the sale of up to 60.41 per cent shares (316,530 shares) on "as is where is" basis.

The bidding started from the floor-price of Rs140 per share with a minimum increase of Rs5 or its multiple to raise the bids. Five parties, who became eligible for participating in the bidding after submitting earnest money, included Petrosin Engineering Pvt Ltd, Islamabad; Canal Associates, Lahore; Iqbal Khan of Bara Ghee Mills, Bara; Kohinoor Sugar Group, Lahore; and Kohisar Enterprises, Karachi.

Iqbal Khan offered the highest bid of Rs255 per share i.e. Rs80.715 million for the offered shares. Kohinoor Sugar Group remained second with an offer of Rs215 per share (Rs79.132 million), while Kohisar Enterprises gave a bid of Rs215 per share (Rs68. 054) and stood third.

The privatization minister said the highest offer received for Kohinoor Oil Mills shares was above the reference price, but did not disclose the reference price. The highest bidder announced to revive the unit, which remained closed since 1997.

Later, the result of the bidding was presented before the Privatization Commission Board, an official statement said. It said that the board decided to recommend the highest offer for approval of the Cabinet Committee on Privatisation (CCoP), which is scheduled to meet on May 7.

The meeting further decided that in view of the general public interest the initial public offering of Pakistan Petroleum Limited (PPL) should be targeted for the last week of May, while the secondary public offering of PIA and IPO of Kot Adu Power Company (Kapco) should follow in June.

The PC Board recommended that keeping in view the experience of SSGC's secondary public offering where all more than 250,000 smaller applicants could not be accommodated due to the smaller percentage of the offer, the percentage for PPL, PIA and Kapco offers should be raised to a realistic level and fresh approval from the CCoP should be sought in this regard.

The meeting also reviewed the implementation status of the decisions taken for the privatization of various transactions. The privatization of power sector entities, including Faisalabad Electric Supply Company, Peshawar Electric Supply Company and Jamshoro Power Company was also discussed.