PHOTO: REUTERS
The National Assembly Standing Committee on Privatisation made the recommendation after Privatisation Secretary Irfan Ali briefed that Rs82.32 billion remained outstanding, some of the amount for more than 25 years, in 14 transactions.
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Out of 14 cases, Rs81.3 billion is outstanding against Dubai-based Etisalat group that bought 26% stake in Pakistan Telecommunication Company Limited (PTCL) in 2005. Etisalat had bought shares with management control at a price of $2.6 billion. After coming to know the second lowest bid was actually $1.4 billion, the UAE-based firm tried to backtrack from the offer.
“The privatisation ministry should send all the 14 cases to NAB to recover the outstanding amount,” directed Standing Committee Chairman Syed Imran Ali Shah. The committee also asked the privatisation ministry to fix responsibility in the case of misusing Pakistan Steel Mills employees’ gratuity and pension funds.
Powerful groups like Schon Group and Etisalat are among those that bought the entities but did not fully clear their dues.
The privatisation secretary said that all the 14 cases were at various stages of litigation and recoveries. He said that a Etisalat team was in town for negotiations over the recovery of $800 million in outstanding dues.
He said that except in case of Etisalat, the government will recover principal and mark-up from the 13 other parties. “The Sale Purchase Agreement with Etisalat does not allow recovery of markup from the buyer,” said Ali.
He hoped that some headway will be made in talks with the Etisalat team. The secretary said that out of roughly 3,500 properties, Pakistan cannot transfer 33 and this has been conveyed to the buyer. He said that the government long ago shared the valuation of these 33 properties but Etisalat has not shared its valuation with Pakistan.
Ali said that one of the reasons for not getting the $800 million from Etisalat was that the buyer made an exceptionally high bid. The secretary said the employees of PTCL have also filed two petitions against the privatisation and Etisalat is also making this as an excuse.
The secretary said that he was particularly focusing on three entities that were bought by the Schon Group but it’s not paying outstanding dues. The Schon Group bought National Fibers Limited, Pak-China Fertilizers Limited and Quaidabad Woolen Mills for Rs1.3 billion. The privatisation ministry documents showed that the group still owes Rs319.3 million to the government of Pakistan.
The privatisation secretary said that the government has won the cases at the arbitration stage and even offered a settlement to Schon Group. After initially agreeing to the settlement plan approved by the Privatisation Commission Board, Schon Group has not submitted the bank guarantees of the due amounts, said the secretary.
“We have now decided that either recovery cases will be pursued aggressively or cases will be sent to NAB against Schon Group,” said Ali.
The other entities where dues are outstanding are Pak PVC Limited, Sindh Alkalis Limited, National Motors Limited, Balochistan Wheels Limited, Dandot Works of National Cement Limited, Haripur Vegetable Oil Processing Industries, Crescent Factories Vegetable Ghee Mills, Siranwali Rice Mills, Dhaunkal Rice Mills and Mubarakpur Rice Mills Limited.
The secretary said that the government has a plan to privatise PIA after the PC Board approved a resolution, asking the government to amend the law to allow sale of majority stakes along with management control to private parties.
The privatisation ministry will soon send a summary to the federal cabinet for approval to initiate the process to amend the PIA law, said the privatisation secretary.
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Parliament had blocked PIA’s privatisation bid two years ago and instead amended the law to end the option of selling 51% stake to the private bidders.
There was political will to privatise the PIA but parliament did not support the government, said PML-N MNA Maiza Hameed.
The secretary said that the government was also trying to settle the outstanding liabilities of Rs188 billion of the Pakistan Steel Mills by utilising 7,500 acres of land, meant for residential and commercial purposes.
He said that since 2008-09, successive governments have given Rs59 billion in bailout packages in addition to Rs15 billion for paying salaries of the employees. The secretary said that the government will try to pay at least Rs15 billion dues of the retired employees before the end of the current fiscal year.
Published in The Express Tribune, December 28h, 2017.
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