ISLAMABAD, Sept 8: The government would transfer 100 per cent shares of Wapda worth around Rs300 billion to 12 corporate companies before Dec 31, 2002, to enable sale of these entities to the private sector, informed sources told Dawn.

These Wapda shares were earlier transferred from ‘Residual Wapda’ to President of Pakistan around two years back as required under $1 billion power sector restructuring and reforms programme of the World Bank (WB) and the Asian Development Bank (ADB) for onward transfer to the private sector after privatization.

Under agreements with the international monetary fund (IMF) and the World Bank, Pakistan is required to privatize at least two power companies — one each in generation and distribution — before Dec 31, 2002.

The Faisalabad Electric Supply Company (FESCO) and Jamshoro Thermal Power Company (Genco-1) have already been transferred to the Privatisation Commission to meet that deadline. The government was in fact planning to complete sale process of Fesco before Sept 30 instead of Dec 31 but its asset valuation done by the financial advisors was very discouraging.

Sources said that financial advisors put Fesco valuation at Rs1.6 billion which was not acceptable to policy committee on power sector restructuring programme and was rejected. The advisors have been asked to re-evaluate the power company that had one of the largest consumer base.

The sources said that the process for transfer of 100 per cent shares and ownership of Wapda to 12 corporate companies has now been accelerated because the sale process could not be completed legally unless the share head is changed from that of the federal government to the company being privatized.

For this purpose, the sources added, a presidential ordinance is in the process of being finalized that would be required to be promulgated before sale transaction of any company is completed.

Official sources said that change of titles (commonly called “Transfer of Titles” in the official jargon) through the ordinance would enable the government to shift its ownership automatically to 12 corporate companies without going into the technical nitty-gritty and legal complications.

The sources said that the steering committee on the restructuring of Wapda that met last week in Islamabad reviewed the whole corporatization programme of Wapda and called for its implementation to be accelerated.

It was believed that if the ordinance was not promulgated, unnecessary technicalities of “Khatunis and Khasras” would need to be followed, which was considered to be a time-consuming and complicated route.

The valuation of Wapda assets like real estate, machinery, investments, life of the plants and buildings on the basis of book value are almost complete now but these would not be considered as ‘reference price’ at the time of privatization, these sources said.

The unbundled corporate companies include eight distribution companies (Discos), three generation companies (Gencos) and a National Transmission and Dispatch Company and have been registered independently under the Companies Ordinance, 1984.