September 3, 2020: Federal Minister for Privatization Mohammedmian Soomro chaired the Privatization Board (PC) meeting in Islamabad. The PC Board members* and senior officials of the Ministry attended the important meeting.
In the meeting various matters relating to Pakistan Steel Mills, status of hiring of Financial Advisory Consortium for Roosevelt Hotel, offloading of OGDCL and PPL shares, Guddu Power plant and Sindh Engineering Limited were discussed.
The PC Board approved the transaction structure for the revival of Pakistan Steel Mills Corporation (PSMC) which has not been operational since June 2015. PSMC was one of the premier state owned enterprises which started its commercial operations in early eighties and had played a pivotal role in the economy of the country when it was fully operational. The transaction structure approval was agreed in principal and FA was asked to move ahead with procedural follow up processes expeditiously. The transaction structure approved by the Board of Privatization Commission will be presented to the Cabinet Committee of Privatization (CCOP) for approval.
The Terms of reference (TORs) for hiring of financial advisors (FAs) for Roosevelt Hotel, owned by PIA were also deliberated upon by the Board members.
The PC Board also discussed divestment of up to 10% of GOP shares in Pakistan Petroleum Limited (PPL) and up to 7% shares in OGDCL. After extensive discussion on transaction fundamentals, market conditions and Pros and Cons of various options the Board decided: PC to proceed for hiring of Financial Advisors Consortium (FAC) for divestment of 10% of GOP shares in PPL. Moreover, proposals from FAC will be obtained for documented as well as undocumented modes of transactions, the process for FAC hiring for OGDCL will commence once the hiring of FAC for PPL is completed.
PC board decided to re-invite the EOIs for hiring of FAs for the privatisation of Guddu Power Plant due to exorbitant financial bid submitted by the top rank consortium earlier. The Privatisation Commission Board also decided to re-invite the Expression of Interest for the appointment of Financial Advisor Consortium (FAC) for the privatisation of Sindh Engineering Limited (SEL). The previous shortlisted top ranked consortium was insisting on changes to the agreed Financial Services Agreement, including changing the transaction scope and payment terms which could not be accepted by Privatisation commission. The Board considered the WAPDA owned property in Swat, KPK; and finally decided referring the matter to CCOP. It is pertinent to mention that the Ministry of Privatisation is going to commence the auction of properties owned by the Federal Government of Pakistan from September 7th 2020.
Federal Minister Privatisation said, Privatization Commission is fully geared up in achieving the objective of expediting the privatization of State own Enterprise to mitigate the drain of these enterprises on the government budget. This is the seventh transaction Approved since the start of the Privatization plans adopted in October 2018 and Privatization Commission will be focusing to complete these transactions successfully along with other transactions which are currently in progress.
In another meeting earlier today Federal Minister Privatisation ensured that long standing matters of KE are on right track to be settled with all stakeholders’ participation. The long standing matters were discussed and an inter-Ministerial committee under the chairmanship of the Minister for Privatisation was formed and a large numbers of meetings were held consistently and matters relating to deed of undertaking, deed of extinguishment and payables and receivables of K-Electric were discussed and moving towards settlement.
It is a good sign that the privatisation of 19 entities is processed simultaneously, the largest ever by the Ministry of Privatisation, and there is no denying the fact that the privatisation process logically is time consuming as there are rules specified and gestation period for an entity to be privatized.