HEC’s land to be handed to SPD

The government has handed over Heavy Electrical Complex’s (HEC) land to the Strategic Plans Division (SPD).

Sources told The Express Tribune that the Ministry of Industries and Production had requested the Economic Coordination Committee (ECC) to review its earlier decision on transferring HEC land to the SPD and authorise it to proceed in that regard.

However, the ECC in its meeting held last month turned down the proposal of reviewing the decision since HEC land had already been given to SPD.

The Ministry of Industries briefed the ECC that HEC was a power transformer manufacturing company offered for sale by the Privatisation Commission after competitive bidding held on February 21, 2022.

EMS Engineering (Pvt) Limited offered the highest bid of Rs1.4 billion and subsequently made initial payment.

As per Clause 24.1 of the share purchase agreement, all additional land other than factory premises will be treated as “excluded asset”. Therefore, 30.8 kanals, located in Taxila, needed to be fully separated from HEC prior to the transfer of shares to the prospective buyer.

To safeguard the interest of the federal government, the ECC decided on November 14, 2022 to hand over HEC land to the SPD.

Following that, demarcation of land was carried out and it was shared immediately with the SPD for onward mutation of land. However, the SPD delayed fee payment for the mutation of land.

Given the impasse, it was decided in a meeting held at the Prime Minister’s Office on April 4, 2023 that the SPD should mutate the land within a week, and in the case of delay, the Ministry of Industries could mutate the land in favour of State Engineering Corporation (SEC), as an interim measure.

It was also decided that the industries ministry should move a summary for the provision of requisite funds for handing over HEC land to SEC.

Consequently, the ministry requested the ECC to allocate funds for the payment of mutation fee of Rs8 million and sought comments of the Finance and Privatisation Divisions.

The Finance Division responded that the industries ministry may arrange funding of Rs8 million from its allocated budget. In case of shortfall, “the Finance Division will provide these funds from the anticipated savings to the extent of Rs8 million.”

The Privatisation Commission, in its response, stated that it had been consistently emphasising that the title of HEC land in Taxila may be transferred to any public sector organisation as may be deemed appropriate by the federal government to clear the way for conclusion of HEC privatisation.

The Ministry of Industries told the Finance Division that the anticipated savings during financial year 2022-23 had already been utilised to bridge shortfalls in employees-related expenses. Therefore, the “ministry did not have requisite funds.”

Throughout the process, the SPD was kept in the loop and requested to pay the mutation fee for land transfer.

Published in The Express Tribune, July 12^th, 2023.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.