Heavy Electrical Complex expected to be privatised by June

ISLAMABAD: The government is expected to complete the privatisation of Heavy Electrical Complex (HEC) by the mid of the current year as it has already shortlisted investors for issuance of request for statement of qualification, officials said on Thursday.

The officials told a weekly meeting on privatisation transactions that 12 expressions of interest had been shortlisted for HEC. The meeting was chaired by Minister for Privatisation Mohammedmian Soomro.

In November last, Cabinet Committee on Privatisation approved the transaction structure for the divestment of 96.6 per cent shares of HEC. This was the seventh transaction approved since the start of the privatisation plans adopted in October 2018.

HEC is located in Hattar Industrial Estate, Haripur in close proximity to the China-Pakistan Economic Corridor route, 2-kilometre from Kot Najeebullah Interchange on the Hazara Expressway. This provides HEC ready access to several key customers including electricity distribution companies, while approximately 20 acres of additional land is available for diversification and expansion. HEC has a high quality power transformer manufacturing facility with an annual production capacity of 3,000 MVA.

As at June 30, 2020, HEC has a paid up capital of Rs1.46 billion and net equity of Rs2.52 billion. Total assets of HEC amount to Rs3.65 billion, primarily comprising of land, building and plant and machinery of Rs2.55 billion. HEC’s annual revenue historically touched Rs910 million. However, it experienced a dip in the past few years due to liquidity constraints. With orders worth Rs1.18 billion, HEC is well placed to achieve historical revenue levels.

The meeting was told that the transaction of Services International Hotel Lahore is at advance stage.

The meeting was told 100 percent amount of nine government-owned properties which were sold during the last year had been received and remaining unsold properties in Rahimyar Khan, Multan and Swat would be re-auctioned in March 2021.

Privatisation Commission planned to re-initiate the process for hiring of financial adviser by mid of March in this year to attract competitive bidding for privatisation of Sindh Engineering Limited.

Privatisation minister advised the officials to expedite other transactions by having multiplying efforts using all possible resources to complete transactions as early as possible.

“Issues with other related ministries should be resolved immediately to expedite transactions. There should be very active follow-up at all relevant levels,” he said.

The progress on power plants of National Power Parks Management Company Limited, Pakistan Steel Mills, First Women Bank, Pakistan Engineering Company Limited, House Building Finance Company and SME Bank was also discussed at the meeting.