Pursuing its real agenda on privatisation, the Pakistan Muslim League-Nawaz (PML-N) government is all set to sell off its stake in four profitable entities through the process of sole offering, Express Investigation Cell (EIC) has learned through reliable sources.
The entities include three banks – HBL, ABL and UBL – and Oil and Gas Development Company Limited (OGDCL), which are ready to be sold off to International Finance Corporation (IFC), a subsidiary of the World Bank and other ‘potential investors’, sources privy to the development said.
In a background interview, a senior official of the Privatisation Commission (PC) revealed that Privatisation Ordinance 2000 did contain provision of sole offering of shares of public sector entities to investors, but it had never been a priority of any government during the last two decades history of Pakistan’s privatisation programme.
The officials said the sale of the shares of public sector entities like banks and exploration company through stock exchanges had always been a top most priority of the past governments as it made the people of Pakistan and small investors beneficiary of the transactions.
According to the official, Privatisation Commission had also suggested to the government to use the option of the stock market to sell off the assets through initial public offering (IPO).
However, Finance Minister Ishaq Dar, in a meeting at his office on January 22, stunned the PC officials by asking them to go for sole offering of the government shares in the listed commercial banks and the OGDCL to the IFC and other potential investors.
He also asked the authorities concerned to bypass the legal condition of hiring financial adviser so that the transactions might be completed before June 30 without wasting time, and the government might raise $2.5 billion to plug in the rising fiscal deficit and meet the government expenditures for the current fiscal year.
At a time when the officials concerned are perturbed over Dar’s mode of privatisation, it will strengthen views of those critics who doubt credibility of the PML-N government’s sell-off plan.
Pakistan Peoples Party (PPP) and Pakistan Tehreek-e-Insaf (PTI) and some other political parties have been raising concern over the list of 31 public sector entities being offered to the investors through privatisation.
The selling of 20% shares of HBL, UBL, ABL and OGDCL may bring $2.5 billion for the PML-N led government for smooth sailing at least for the current fiscal year, but it would deprive Pakistan of a sizeable income as these golden assets contribute Rs200 billion to Rs250 billion to the country’s annual income.
Though more than one concerned officials confirmed that the Privatisation Commission was under pressure from Dar for a hasty sole offering of different public sector entities, the PC’s Chairman Muhammad Zubair denied such reports.
“The government is under huge financial pressure and wants to raise some resources from privatisation proceeds of banks and oil and gas sector before June 30, but it was untrue that Dar wanted privatisation of public entities through some fishy procedure,” he claimed.
“I can assure you that the government will follow a transparent procedure to off-load its share in any profit-making entities including the banks,” he said.
Published in The Express Tribune, January 28th, 2014.