ISLAMABAD - The government’s plan of privatising public sector entities (PSEs) is moving at snail’s pace, as it had not privatised any entity since August 2015.
The PML-N government after coming into power in June 2013 had announced to privatise 69 PSEs, which included loss-making Pakistan International Airlines, Pakistan Steel Mills, and power generation companies. However, the government had so far privatised profit-making entities, including Habib Bank Limited (HBL), United Bank Limited (UBL), Allied Bank Limited (ABL), Pakistan Petroleum Limited (PPL) and National Power Construction Company.
Meanwhile, the government has not appointed new chairman of Privatization Commission after Muhammad Zubair was appointed as Governor Sindh in February this year. Similarly, Privatization Commission former Secretary Sardar Ahmad Nawaz Sukhera has been transferred to Ministry of Information and Broadcasting. Both Zubair and Sukhera had done a lot of work for privatisation programme. Therefore, their absence from the Privatisation Commission would half the privatisation programme.
Earlier, the government had set new deadlines for privatising two loss-making entities, June and August of next year (2017) for Pakistan Steel Mills (PSM) and Pakistan International Airlines (PIA) respectively. However, the government could not meet the deadline due to the slow pace of the privatisation plan.
It is worth mentioning here that government had generated Rs2.5 billion in fiscal year 2015-16 by privatising NPCC only. In year 2014-15, the government had generated Rs177 billion through privatisation. However, the government failed to privatise any single entity within ongoing financial year 2016-17.
However, the Ministry of Finance has issued a statement regarding the government’s privatisation programme. According to the statement, “Implementation of the government’s multi-faceted reforms for revival of Public Sector Enterprises (PSEs) is based on a number of pillars, which include divestment through strategic partnership and public offerings, strengthening enforcement of corporate governance rules, implementation of restructuring plans and regulatory reforms. Transactions to date include the sale of minority shareholding in United Bank Limited, Allied Bank Limited, Habib Bank Limited and Pakistan Petroleum Limited and the strategic sale of National Power Construction Company. Financial Advisers have been hired for structuring public offerings for the Distribution Companies (DISCOs) and Generation Companies (GENCOs). The governance of DISCOs, three GENCOs, and the NTDC has been transferred to new boards of directors and management. Expression of Interest has been invited for acquisition of up to 40.25 percent in the share capital of KAPCO and transaction is expected to be completed during FY2016-17. The State Life Insurance Corporation has been corporatised and its public offering is in process along with Mari Petroleum Company Limited.
Further, the restructuring process of House Building Finance Corporation (HBFC) has been completed and due diligence is being carried out for SME Bank by finalising its transaction structure for approval. A road map for corporatisation of Postal Life Insurance has also been developed for broader institutional and stakeholder approval.”