PM’s aide Ali likely to be given privatisation charge

ISLAMABAD: Prime Minister’s Adviser Muhammad Ali is likely to be given the portfolio of Privatisation, well-placed sources told The News.

They said Ali Pervaiz Malik is likely to be given either petroleum or revenue division. The sources did not rule out Raza Hayat Hiraj’s appointment to the petroleum division.

The sources said Muhammad Ali is being tasked with ensuring the privatisation of power distribution companies (Discos) and state-owned Sui Northern and Sui Southern gas companies by unbundling them into transmission and distribution companies.

Since Muhammad Ali is well versed in the energy sector as he served as energy minister during the interim regime, the power circles want him to serve as privatisation minister.

According to a latest report, the state-owned companies have caused an annual loss of Rs851 billion, while the Discos are causing an annual loss of Rs600 billion and injecting Rs45 billion a month in circular debt.

Mohammed Ali is also one of the main members of the task force on power, which terminated contracts of six independent power producers (IPPs), converted power purchase agreements (PPAs) of 15 IPPs on take and pay mode from take or pay model and delinked the power tariff of eight bagasse-based power plants from US dollar and linked it to Pak rupee. The task force has also saved future payments of Rs1,500 billion. It has also brought down the return on equity (RoE) of government power plants to 13 per cent based on Pak rupee and locked the value of US dollar at Rs168.

The task force is still in talks with wind and solar power plants for the reduction of their tariff. The task force is expected to cut power tariff by Rs2 per unit through its negotiations with IPPs, government power plants (GPPs) and solar and wind plants. So far, the task force has managed to cut the power tariff by Rs1.87 per unit.

The official sources said the main challenge rests with the Discos, which emerged as a black hole in the economy. Muhammad Ali will also accelerate the sale process of Pakistan International Airlines (PIA), which earlier failed to attract investors, in an amicable way.