Government seeks inputs on OGDCL divestment

ISLAMABAD: Cabinet Committee on Privatisation (CCOP) on Tuesday sought additional inputs from all the relevant stakeholders to go for divestment of government’s seven percent shares in the country’s biggest energy firm Oil and Gas Development Company (OGDC).

“For divesting shares of OGDCL, CCOP directed that the matter requires further deliberation,” an official statement said. “CCOP directed that all the relevant stake holders including the ministry of energy to come up with a presentation on the proposal in the next meeting.”

Previously, reports were doing round that the government planned to divest its seven percent stake in OGDCL at a discount price, triggering selloff in the equity market.

The committee asked the proposals during a meeting presided over by Adviser to the Prime Minister on Finance and Revenue Hafeez Shaikh.

“The chair directed that all the processes related to the privatisation process may be carried out in a transparent but expeditious manner so that all the targets are achieved within the given time frame,” the statement quoted Shaikh as saying.

The meeting was told that the government received expression of interests (EoIs) from financial advisers for the privatisation of loss-making megawatts Guddu power plant.

The privatisation ministry said it received EoIs from financial advisers on the proposal of the privatisation of the Guddu power plant. Parties have been shortlisted for issuance of request for proposals, it said.

The committee was briefed that the privatisation process was moving ahead in a relatively faster manner in case of proposed up to 20 percent divestment of the SME Bank Limited and Pak Reinsurance Co. Ltd. The ministry is expecting to complete the process in the required time frame, it was told.

On the status of the revival of Pakistan Steel Mills, the committee directed the commission to complete all the standard requirements in a regular but expeditious manner and keep on updating the government on any issues that might surface during the smooth running of the process.

The meeting also discussed other issues related to the transaction. It underscored a need for further discussion on the project between National Electric Power Regulatory Authority, power division and ministries of finance and privatisation.

The ministry was further asked to come up with a joint proposal in the next meeting of CCOP for moving ahead in the transaction to ensure its completion within the given time frame.

The government enlisted 49 state-owned entities into privatisation program over the next five years in order to mobilise revenue and shed lose-making assets.

Faced with a challenge to reduce swollen fiscal deficit – that reached 8.9 percent of GDP in the last fiscal year –, the selloff of public sector enterprises is considered an appropriate option to ease financial woes under an IMF’s loan obligation.

Last year, Pakistan agreed to a $6 billion loan program of the International Monetary Fund (IMF) to support external account and introduce structural reforms.