ISLAMABAD - The PML-N government is all set to smoothly privatise nearly seventy public sector entities (PSEs) till the completion of its constitutional five years tenure, as the main opposition parties including the PPP have seemingly dropped their plans to lock horns with government on this important matter.
The government has committed with the International Monetary Fund (IMF) to privatize 68 PSEs, which roughly are eating country’s Rs 500 billion annually. State Minister for Privatization Mohammad Zubair on Thursday said that the government would private all 68 PSEs in its five years constitutional tenure. However, economists do not agree with the government on it as they said it would take more time than five years.
“The government will complete its privatization programme of selling 68 public sector entities during its constitutional five years tenure with complete transparency”, said Mohammad Zubair, State Minister for Privatization while talking to The Nation. However, he could not share the amount that will be generated from the entire privatisation programme. “I do not know how much revenue will be generated through the privatization process, as it is premature to say anything at this stage”, he added. He informed that the government has expedited the privatization process, as three entities namely OGDCL (Oil and Gas Development Company Limited), PPL (Pakistan Petroleum Limited) and UBL (Untied Bank Limited) would be privatized before June 30 this year.
Zubair said that government would generate Rs 140 billion by disinvesting shares of OGDCL, UBL and PPL within ongoing fiscal year (FY2014), which would help in controlling budget deficit. The government has appointed financial advisors (FAs) for these three entities while it has extended the deadline for FAs appointment for PIA, FESCO, National Power Construction Company (NPCC) and Heavy Electrical Complex for another fifteen days. The minister dispelled the impression that privatization process is slow, as he said, “We have done many things since I assumed the charge of Privatization Commission on December 26, 2013, as government constituted board and reviewed the situation of all PSEs”.
Talking about the privatization of financially troubled Pakistan International Airlines (PIA) and Pakistan Steel Mills (PSM), Mohammad Zubair said that privatization of these two departments would take some time mainly due to their structural reforms. “We will miss the IMF deadline of privatizing PIA by December 2014, as we have not yet appointed the financial advisor”, he admitted.
On a question of differences with Shujaat Azeem, Special Assistant to Prime Minister on Aviation, on privatization of PIA, the state minister said, “Prime Minister has mandated me for privatization of national flag carrier and I am working on it”.
He said PIA would not be sold on “as is basis” and the entity would be first restructured. The government is going to set up a subsidiary of PIA and its core business will be transferred to the subsidiary that will eventually be privatized. He said the rest of the services of PIA would be shifted to PIA Holdings, which the government would gradually privatize. On Pakistan Steel Mills, he said that Economic Coordination Committee of the Cabinet would discuss the restructuring plan in today’s (Friday) meeting.
However, the independent economists believed that the government might struggle to complete the whole process of privatizing 68 entities in five years. “I do not think the government will privatize entire 68 entities in next five years, as it can only disinvest the shares of financial institutions like banks”, said Dr Ashfaque Hassan Khan said.
He further said, “The government will face problem in privatizing the strategic shares like PIA and PSM”. Privatization of PIA and PSM would take much time. “I am in favour of privatizing the public sector entities but government should include credible people in Privatization Commission board”, he added. On the other hand, the political parties have even stopped criticizing the government’s move of selling public sector entities, as earlier they warned the government of massive protests against privatization process.
The discouraging attitudes of the opposition parties are apparently paving way for the government to complete the privatization process.
The government has planned to privatize 68 PSEs wherein 31 entities would be privatized in the first stage. Therefore, the Privatization Commission had so far given approval of privatisation/disinvestments of shares of 11 public sector entities.
The 11 entities including PIA, OGDCL, HBL, UBL, ABL, PPL, NPCC and Heavy Electrical Complex, two Discos (Fesco and Lesco) and one Genco (TPS Muzaffargarh 1350 MW). However, the government would divest the shares of three public sector entities OGDCL, PPL and UBL before June 30 2014.