With no significant performance over the past two years, the government has not set any target for privatisation proceeds for the Ministry of Privatisation for financial year 2010-11. However, budget documents show in spite of that the government has allocated Rs72.7 million for running the affairs of the ministry.
The privatisation ministry in the current fiscal year ending June 30 failed to fetch a single penny on account of privatisation. Its proceeds target was Rs19 billion but the coffers were empty. Last fiscal year too, the ministry could only generate Rs1.3 billion against the target of Rs25 billion.
This is the second consecutive financial year when the privatisation ministry has failed to justify its existence. During this period, its running expenditures crossed Rs126 million.
The strategic goal of the ministry is to privatise state-owned enterprises for fiscal stability and debt retirement.
According to the law, 10 per cent of the proceeds can be used for poverty alleviation programmes and the remaining 90 per cent for retiring the federal government’s debts.
Secretary Privatisation Shahab Khawaja said that because of the failure to achieve this year’s privatisation target, the government did not set a target for the next financial year.
He said this year’s target could not be met because of delay in policy formulation. However, according to the Medium Term Budget Estimates for Services Delivery, the Cabinet Committee on Privatisation approved a new privatisation policy in February 2009 and the ministry has enough time to deliver on promises.
Khawaja said the ministry was in the process of sending details of likely transactions in the next fiscal year to the finance ministry. “The privatisation ministry is planning to sell Heavy Mechanical Complex, SME Bank, Oil and Gas Development Company, Pakistan Mineral Development Corporation’s mines and Faisalabad Electric Supply Company,” he added.
These are the companies which have been in a privatisation list on the ministry’s website along with many others for the last couple of years.
The privatisation ministry also could not solve the issue of $800 million dues from the privatisation of Pakistan Telecommunication Co.
The secretary said the finance ministry has been discussing the issue with Etisalat, a Dubai-based company which bought 26 per cent shares of the PTCL with management control. He hoped the matter would be resolved in near future.
The company had paid the third installment of $133.3 million in 2008 and withheld the remaining amount.
Published in the Express Tribune, June 8th, 2010.
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