Privatisation Commission looks to tap bond market
The decision is taken to generate money to meet the rising government expenditures to finance reconstruction.
ISLAMABAD:
The Privatisation Commission (PC) is considering issuing exchangeable bonds against profitable government entities in order to generate money to meet the rising government expenditures needed to finance reconstruction following floods in the country.
The Board of Privatisation Commission, headed by Minister for Privatisation Waqar Ahmed Khan, deliberated over deploying investment tools to generate income by floating convertible bonds in the market.
An official of the PC said that market appetite for such instruments would determine the amount to be raised. An exchangeable bond is a special type of security that permits the holder to exchange the bond for shares of a company.
The PC may float bonds backed by the petroleum sector, particularly Oil and Gas Development Company Ltd (OGDC) convertible bonds, he added.
Interestingly, a similar plan of the PC hit roadblocks six months ago when the finance ministry vehemently opposed any such move arguing that the issuance of bonds fell under the domain of the finance ministry since it is responsible for managing the country’s debts and liabilities. The Privatisation Commission is also under criticism for failing to achieve its primary privatisation target for the last two years.
Meanwhile, the government is considering various other options to generate funds for funding the reconstruction of areas affected by the floods. These options include levying a one-off flood surcharge and slashing public sector development spending.
The Board of Privatisation Commission has also decided to allocate Rs200 million for flood relief activities and contribute a fraction of its employees salaries. The Board also decided to constitute teams comprising PC officials and consultants in order to coordinate with the district administration for studying relief operations in the country. A PC official said that the Rs200 million would be generated by charging processing fee on privatisation transactions.
Additionally, Waqar Ahmed Khan said that helping flood victims was a national obligation and needed to be assigned top priority by each individual as it would require a substantial amount of time to bring normalcy to areas affected by devastating floods and torrential rains.
He also directed PC officials to set up tent villages, food and medical aid points in the affected areas of all the provinces.
PC officials’ teams would soon be dispatched to the areas to start identifying needs for reconstruction activity and to assess rehabilitation requirements in areas where water has started receding.
Published in The Express Tribune, August 24th, 2010.
The Privatisation Commission (PC) is considering issuing exchangeable bonds against profitable government entities in order to generate money to meet the rising government expenditures needed to finance reconstruction following floods in the country.
The Board of Privatisation Commission, headed by Minister for Privatisation Waqar Ahmed Khan, deliberated over deploying investment tools to generate income by floating convertible bonds in the market.
An official of the PC said that market appetite for such instruments would determine the amount to be raised. An exchangeable bond is a special type of security that permits the holder to exchange the bond for shares of a company.
The PC may float bonds backed by the petroleum sector, particularly Oil and Gas Development Company Ltd (OGDC) convertible bonds, he added.
Interestingly, a similar plan of the PC hit roadblocks six months ago when the finance ministry vehemently opposed any such move arguing that the issuance of bonds fell under the domain of the finance ministry since it is responsible for managing the country’s debts and liabilities. The Privatisation Commission is also under criticism for failing to achieve its primary privatisation target for the last two years.
Meanwhile, the government is considering various other options to generate funds for funding the reconstruction of areas affected by the floods. These options include levying a one-off flood surcharge and slashing public sector development spending.
The Board of Privatisation Commission has also decided to allocate Rs200 million for flood relief activities and contribute a fraction of its employees salaries. The Board also decided to constitute teams comprising PC officials and consultants in order to coordinate with the district administration for studying relief operations in the country. A PC official said that the Rs200 million would be generated by charging processing fee on privatisation transactions.
Additionally, Waqar Ahmed Khan said that helping flood victims was a national obligation and needed to be assigned top priority by each individual as it would require a substantial amount of time to bring normalcy to areas affected by devastating floods and torrential rains.
He also directed PC officials to set up tent villages, food and medical aid points in the affected areas of all the provinces.
PC officials’ teams would soon be dispatched to the areas to start identifying needs for reconstruction activity and to assess rehabilitation requirements in areas where water has started receding.
Published in The Express Tribune, August 24th, 2010.