10 PSEs to be privatised this year: minister

ISLAMABAD: Pakistan has agreed with the IMF to privatize 10 public sector enterprises during the current fiscal year with specific deadlines including strategic sale of Pakistan Steel Mills (PSM) by completing its bidding process till end December 2015.
Claiming that all major political parties including Pakistan People’s Party assured privatization of loss-making entities the minister of state for privatization Mohammad Zubair said that the transaction structure for PSM and Pakistan International Airlines (PIA) would be finalized within weeks.
In an exclusive interview with The News at his ministerial office on Friday the chairman Privatization Commission said that efforts are under way to resolve thelingering controversy over $800 million pending installment from Etisalat on the privatization of PTCL and hoped that this issue would be resolved soon. He said that of 3000 properties that Etisalat had demanded 34 could not be transferred. “Now we have offered them to deduct amount of 34 properties and pay the remaining amount to Pakistan,” he added.
During the eighth review with the IMF for $6.2 billion bailout package, Pakistan and the Fund agreed to accomplish privatization of 10 PSEs including State Life Insurance Corporation (SLIC) till end-March 2016, Mari Petroleum till June 2016 and PARCO till June 2016 through stock market transactions.
The strategic sale of Faisalabad Electric Supply Company (FESCO) will be accomplished till end-June 2016, IESCO till end-June 2016, Lahore Electric Power Company (LESCO) till June 2016, National Power Generation Company (NGPCC) by end-June 2016, Kot Adu Power Company (KAPCO) by end-March 2016, PIA by end-March 2016 and PSM by end-December 2015.
About NGPCC, the minister said that the government would privatize the Muzzafargarh facility of 1350 MW only while remaining three entities including Nandi Pur would remain in the public sector.
When asked about privatization of PIA, he said that the government was exploring different options for this transaction. In order to remove legal hitches either the 1956 act on the basis of which PIA is being run, will be repealed through Parliament or a presidential ordinance will be issued to move ahead.
He said that PIA would unbundled into two entities and its core business would be privatized while employees’ interest would be fully protected. He said that the accumulated losses of PIA were touching Rs220 billion.
On PSM privatization, he said that non-deal road shows would be arranged in China by end September while in the second phase such shows would be arranged in Russia and the Central Asian Republics (CARs). The transaction structure of PSM, he said, would be finalized soon after which the Expression of Interest (EOI) would be sought within a couple of weeks.
Without sharing details of transaction structures, he said that the investors would like to get clean balance sheet of all entities so the liabilities of PSM to the tune of Rs120 billion would be cleared to ensure its clean slate.
To another query about post privatization deal, he said that the government would insert certain clauses into contacts where the buyer would not be able to change core business, especially in case of utilities. He said that the post-privatization monitoring mechanism would be placed to ensure transparency.
But he added in the same breath that the philosophy of privatization could only benefit if there was permission to run only viable businesses.