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February 5, 2020

Government eyes Rs6.6bln from state lands auction

Business

February 5, 2020

ISLAMABAD: Government on Tuesday approved a proposal to put on auction 27 state-owned land assets with an estimated value of around seven billion rupees, in a bid to increase nontax revenue under a condition of the International Monetary Fund (IMF).

The decision was taken at a meeting of the Cabinet Committee on Privatisation (CCoP) held at the cabinet block with Adviser to the Prime Minister on Finance and Revenue Hafeez Shaikh in the chair.

The committee allowed open auction bidding for 27 land assets owned by federal government entities in pursuance of a federal cabinet decision to dispose of unproductive state lands and assets.

The Privatisation Commission told the committee that the bidding process for the 27 properties would likely be completed by the end of April 2020.

Last month, Privatization Minister Muhammad Soomro unveiled the government’s plan to put 27 state-owned unproductive properties on auction in the current quarter. This would complement the plan to privatise 33 state-owned enterprises to service debts and fund public welfare projects.

Soomro said the auctioning would be carried out in next two months with road shows for investors having already been held. Foreign investors from Dubai and Qatar and overseas Pakistanis have already expressed interest in buying these properties.

The CCoP discussed and approved the recommendations of the transaction committee, inter-ministerial committee and Privatisation Commission Board for an open auction bidding procedure and total reserve price of Rs6.62 billion for 27 properties belonging to different federal government divisions and entities.

Sources said the government requested the IMF mission to further slash the Federal Board of Revenue’s (FBR) annual target second time by over Rs300 billion, bringing it down from Rs5.2 trillion to less than Rs5 trillion mark.

IMF is on a visit to review progress of its $6 billion financial aid to Pakistan in line with the benchmarks. The Fund’s team would stay in the country till February 13. Last year, Pakistan agreed to 13th IMF loan program since the late 1980s to avert balance of payment crisis.

Any possible ‘fiscal adjustment’ would be linked with the government’s ability to increase nontax revenue target for the current fiscal year. The non-tax revenue can be increased through accelerating privatisation proceeds among other things.

The government revised up nontax revenue target by 0.8 percent of GDP to make up for the shortfall in tax revenue collection by the FBR and keep the budget deficit, especially the primary deficit, within the desired limits.