Drops proposal of divesting shareholding in two blue-chip petroleum companies.
PHOTO: FILE
ISLAMABAD: The Cabinet Committee on Privatisation (CCOP) approved on Wednesday the removal of all labour-sensitive state-owned enterprises from the privatisation programme and also dropped a proposal to divest shares in two blue-chip petroleum-sector companies due to constitutional issues.
The entities that were removed from the privatisation programme included Pakistan International Airlines (PIA), Pakistan Steel Mills (PSM) and Pakistan Railways (PR). All these enterprises were consuming huge state funds every year, but the government opted to keep running them.
Headed by Finance Minister Asad Umar, the CCOP approved nearly 10 entities for privatisation in the next one to three years, but made changes in the list forwarded to it by the Privatisation Commission board a day earlier.
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The CCOP ordered the privatisation of Nandipur power plant, Lakhra coal mines and Services International Hotel Lahore - all the three entities that the PC board had recommended for delisting from the privatisation programme.
The committee did not approve the privatisation of Oil and Gas Development Company Limited (OGDCL) and Pakistan Petroleum Limited (PPL) due to objections raised by the provinces in light of the 18th Constitutional Amendment, according to officials of the Ministry of Finance who attended the meeting.
The last K-P government had gone to the court against the PML-N government’s decision to divest shareholding in OGDCL. The CCOP asked the Privatisation Commission to seek the nod of the Council of Common Interests (CCI) first before bringing oil and gas companies for privatisation.
Similarly, the CCOP also deferred a decision on the privatisation of Pakistan Reinsurance Company Limited and State Life Insurance Corporation due to objections raised by the Ministry of Commerce.
The cabinet committee also linked the privatisation of nine power distribution companies and five power generation companies with the recommendations to be given by the Prime Minister’s Task Force on Energy.
The cabinet committee approved the revised privatisation programme a week before the start of the International Monetary Fund’s (IMF) visit. The IMF team is arriving next week to hold talks for a second bailout programme in five years.
The originally approved list of Council of Common Interests — the highest constitutional body — contained 62 enterprises for privatisation. Of these, the PC board recommended to retain only 11 for active privatisation to be completed in next three years, put the privatisation of another 24 enterprises on the backburner and dropped 29 loss-making companies from the privatisation programme.
Revised active privatisation list
Out of the four banking and insurance companies that the PC board recommended for privatisation, the CCOP approved privatisation of only SME Bank Limited and First Women Bank Limited. SME Bank is set to be privatised first.
The commerce secretary advised the CCOP to conduct a study before privatising Pakistan Reinsurance Company and State Life Insurance Corporation. He was of the view that these companies had captive markets and should not be sold off.
The CCOP approved the sale of shares of Mari Petroleum Limited at the stock exchange.
It directed the officials concerned to fast-track the privatisation of 1,233-megawatt Balloki power plant and 1,230MW Haveli Bahadur Shah power plant, said the officials.
The CCOP included Lakhra Coal Mines and Nandipur Power Plant in the active privatisation list. The Nandipur plant will be privatised in the medium term, said the Ministry of Finance official.
The committee endorsed the strategic sale of PIA Roosevelt Hotel New York and Scribe Hotel Paris within the next three years. It also approved the sale of assets of Convention Centre Islamabad in the short term.
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On the desire of PM Adviser on Commerce Abdul Razak Dawood, the CCOP deferred a decision on the privatisation and delisting of industrial enterprises. Dawood sought time to review financial and administrative positions of the industrial-sector companies, said the officials.
Excluding the industrial-sector and a couple of energy firms, the CCOP approved the delisting of the remaining enterprises, recommended by the PC board, said the officials.
Published in The Express Tribune, November 1st, 2018.
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