ISLAMABAD - The Board of Investment Chairman Mohammad Zubair on Friday said that government would save Rs 500 billion every year by privatising 31 loss-making public sector entities (PSEs) as decided by Cabinet Committee on Privatisation (CCoP) last week.
“Government is facing a cumulative loss of around Rs 500 billion every year due to losses occurring in PSEs that are denting the economy. The loss is one-fourth of the total annual budget which is going down the drain”, said chairman Board of Investment while addressing a press conference here. The government could save Rs 500 billion by privatising loss-making entities, he added. He further that CCoP has set the target for the sell-off of all the 31 PSEs in 18 months through a transparent bidding process.
Talking about the mode of privatisation of these government entities, he said the management of some of the entities which are under the control of government would be transferred to private sector with 26 percent shares through the bidding process. In the first phase, five entities, including Pakistan International Airlines and Pakistan Steel Mills, would be put on sale. The government has started analysing various aspects involved in the sale of PSEs, he maintained.
He said that he would ask the government to utilise the revenue generated from privatisation for loan repayment and welfare of the people.
The companies cleared for divestment include the Oil and Gas Development Company Limited, Pakistan Petroleum Limited, Mari Gas, Pak-Arab Refinery, Pakistan State Oil, Sui Southern Gas Company Limited, Sui Northern Gas Pipelines Limited, Pakistan International Airlines, PIA-Roosevelt Hotel, New York, Pakistan Railways, Gujranwala Electric Power Company, Lahore Electric Supply Company, Islamabad Electric Supply Company, Faisalabad Electric Supply Company, Northern Electric Generation Company, Pakistan Steel Mills, National Power Construction Company and Pakistan National Shipping Corporation.
Pakistan has agreed with IMF for privatisation of PSEs for $6.7 billion loan programme under extended funds facility (EFF). Pakistan was supposed to develop and approve a reform strategy for public 30 sector enterprises (PSEs) out of the 65 short-listed firms for privatisation, according to the IMF documents.