Privatisation Commission fails to appoint advisers

Delay occurs as law ministry could not clarify whether the power plants can be sold without the nod of provinces

ISLAMABAD: The Privatisation Commission board on Tuesday could not take a decision on appointing financial advisers for the sale of two liquefied natural gas (LNG)-fired power plants due to failure of the Ministry of Law to address the constitutional question of whether the plants could be sold without the approval of provinces.

Headed by Privatisation Commission Chairman Muhammad Mian Soomro, the board put off the decision till the time Ministry of Law and Justice gave its legal opinion.

The commission had sought the board’s approval for hiring financial advisers for the privatisation of 1,230-megawatt Haveli Bahadur Shah and 1,223MW Balloki power plants.

On the directives of the Cabinet Committee on Privatisation (CCOP), the Privatisation Commission had written a letter to the Ministry of Law on October 31 to seek its opinion.

The commission asked the law ministry whether approval of the Council of Common Interests (CCI) - an inter-provincial body - was required for the privatisation of the two power plants.

The board was informed that considerable time had passed and despite repeated requests the legal opinion was still awaited.

The National Power Parks Management Company (Private) Limited (NPPMCL) owns both the power plants.

The Privatisation Commission chairman on Tuesday wrote letters to Finance Minister Asad Umar and Law Minister Barrister Farogh Naseem, informing them about the delay in starting the process.

The issue highlights usual bureaucratic hurdles that cause unnecessary delay in taking timely decisions. The two power plants are the only worthwhile entities in the revised list of 10 enterprises that the Pakistan Tehreek-e-Insaf (PTI) government has prepared for privatisation.

A statement of the Privatisation Commission stated that the board directed the management of National Power Parks Company to submit a working paper on the feasibility study for privatisation of the two power plants. It sought the company’s opinion whether the two plants should be sold as a bundle or as separate entities along with timelines, justifications and any associated issues for consideration of the board and the CCOP.

The board also called for initiating the process for hiring financial advisers for other public-sector enterprises that were part of the active privatisation programme, which was approved by the federal cabinet.

Committees for the evaluation of proposals for privatisation transactions were constituted, according to the Privatisation Commission.



The board also constituted a committee for the resolution of the issue of contingent payments in the case of financial advisory services agreements concerning the privatisation transactions initiated during the tenure of previous government.

The last government had hired financial advisers for the privatisation of Pakistan International Airlines, Pakistan Steel Mills and all power distribution and generation companies. The PTI government has removed all these entities from the privatisation programme.

The board also approved the initiation of the process of hiring human resources and issued directives for the review of human resources regulations in order to streamline them and remove anomalies.

The privatisation secretary wanted an annual performance review of the consultants hired from the private sector. The commission sought the board’s approval for hiring senior legal consultants, consultants and technical support staff. The board allowed the hiring only on need basis.

The commission informed the board that a senior legal consultant had resigned and another was suspended, due to which the Privatisation Commission was facing difficulties in dealing with ongoing litigation.

The commission sought permission to hire two senior legal consultants, one consultant for banking and capital market transactions and two consultants for financial and energy sector transactions.



The commission also requested the board to allow payment of monthly rent as part of the salary of officials and officers working in the Privatisation Commission. Presently, there are 94 employees who are working in the commission and an expenditure of Rs15.6 million annually will be incurred on accommodation expenses.

Unlike its sister commissions which were granted market-based salaries and other benefits, the employees of Privatisation Commission were placed not only on normal government pay but were deprived of pension and other facilities, according to the Commission.

Published in The Express Tribune, November 14^th, 2018.

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