Owners of unit privatised in 1992 yet to pay Rs101m

The buyer of Pak PVC is still withholding the remaining bid money, loans and employee dues.

ISLAMABAD: The PML-N government handed over a company in 1992 on payment of just 40 per cent of its sale value to a buyer, who is yet to pay the balance bid amount, loans obtained from government and employees’ legal dues.

The matter came to light when a former employee of the Pak PVC Limited – a plastic manufacturing concern, appealed to a National Assembly panel for the payment of dues of employees 18 years after the entity’s privatisation.

His appeal also disclosed that the industrial unit’s buyer was also withholding the remaining bid money of Rs38 million, besides loans worth Rs42 million and employees’ dues amounting to Rs21.3 million.

According to the Privatisation Commission’s website, the Pak PVC Ltd was sold to Riaz Shafi Reysheem at Rs63.6 million in June 1992.

The National Assembly’s Standing Committee on Privatisation, headed by Khawaja Suhail Mansoor of MQM, recommended the prime minister to at least pay the employees’ dues. “Vested interests led to sale of the factory that was a profitable entity in 1992,” Dr Abdul Wahid Soomro, an MNA from Thatta, said.

He said that the factory had been sold at a “very nominal price”, adding that even the factory’s inventory was twice the sale price when the unit was sold. The joint secretary of the Privatisation Commission said that the buyer has flatly refused to clear dues.

Minister for Privatisation Senator Waqar Ahmed said that the matter was sub judice as the case was being heard by the Sindh High Court, adding that the government had already cancelled the allotment of two plots in Islamabad which had been transferred to the firm’s buyer under the purchase deal.

Privatisation of profitable entities

Expressing concern at the Privatisation Commission plans to sell profitable entities, members of the committee said that it should instead concentrate on offloading loss-making enterprises.

The commission intends to off-load up to 20 per cent shares of the Islamabad Electric Supply Company (Iesco) via an initial public offering in the Karachi Stock Exchange. Among nine of the power distribution companies, Iesco is the most efficient with least line losses.

According to government’s own data, eight public sector enterprises were making annual Rs250 billion losses.

The cabinet committee on privatisation had recently deferred the matter and asked the Privatisation Commission to get clearance from the Council of Common Interests, a high-powered constitutional body to settle disputes between the centre and the provinces.

Published in The Express Tribune, February 8^th, 2011.