ADB to provide $6.67 billion for privatisation plan

ISLAMABAD: The Asian Development Bank (ADB) on Tuesday signed an agreement with Pakistan to support the country’s privatisation plan and monitor transactions to ensure transparency.
Pakistan under the ongoing IMF programme for getting $6.67 billion is struggling to implement the idea of finding strategic partnership for resolving the problem of cash bleeding public sector enterprises which consume over Rs500 billion losses at the cost of taxpayers money. The government is going to privatise PIA, Pakistan Steel Mills and cash-starved power sector in the months ahead. So far the government had offloaded shares of banks in order to improve its liquidity crunch after assuming reins of power.However, the decision to offload share of OGDCL-related transaction was canceled at the last moment after receiving low offers mainly because of decline in oil prices in international market and political instability the country faced in the aftermath of PTI-led sit in politics during last few months.
According to ADB’s announcement made here, the ADB and the government of Pakistan signed an agreement to invest $20 million to improve corporate governance, technical capacity and regulatory framework of Pakistan’s privatisation programme.It will also assist the Privatisation Commission in preparing a privatisation strategy and monitor the transaction.
To ensure transparency for executing privatisation programme, the sources said, remained problematic area in Pakistan so far and there is need to ensure transparency in future proceeds, said the official sources.
Dr. Werner E. Liepach, ADB’s Country Director for Pakistan and Mohammad Saleem Sethi, Secretary Economic Affairs Division (EAD) signed the loan agreement.“The project will finance management and financial consulting services to develop the capacity of Ministry of Finance to monitor the Public Sector Enterprise (PSE) portfolio, assess fiscal liabilities, identify and track potential issues, and oversee corporate restructuring of selected PSE.
It will also strengthen the process by improving the corporate governance and management capacity of selected PSE, and strengthening governance and regulations in selected sectors dominated by PSE”, said Dr. Liepach.
The PSE accounts for about 10 percent of Pakistan’s gross domestic product (GDP) and thus comprise a major share of Pakistan’s economy.Weak corporate governance and management issues have been resulting in their poor service delivery and bleeding of country’s scarce financial resources with tax payers ultimately bearing the brunt of these inefficiencies.
The project seeks improvement of the governance and regulatory regime to ensure that efficiency gains in PSE are in line with interest of the general public and consumers. The assistance will help improve financial control and reporting through improved inter-agency coordination and online monitoring system at the Security and Exchange Commission of Pakistan (SECP).“The expected impact would be reduced fiscal and economic costs through improved management and governance of Pakistan’s Public Sector Enterprises,” Dr. Liepach added.