Privatisation process: Govt to sell assets in sole offering

Published: January 28, 2014
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Instructs Privatisation Commission to prepare for sale of shares of three commercial banks and OGDCL. PHOTO: FILE

Instructs Privatisation Commission to prepare for sale of shares of three commercial banks and OGDCL. PHOTO: FILE

ISLAMABAD: 

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.

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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.

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Reader Comments (9)

  • Abid
    Jan 28, 2014 - 11:28AM

    Great going PML(N) and I fully support the privatization of 31 institutes before the end of this year. But remember it should be transparent and on merit.

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  • MAD
    Jan 28, 2014 - 11:36AM

    As expected…sigh

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  • M.Faisal
    Jan 28, 2014 - 12:24PM

    I know people working in government institution. If I was not a Muslim and have Fear of God I must opted firstly for government sector because you have to do nothing for perks and privileges just flatter your boss and arrange some parties. All Government institution should go through value audit, By Cost Management accountants then every one will see the wastage of resources been done through decades, Government should give management Operating rights not strategic rights to Private sector by holding majority shares in hand… Pakistan Khappay..!

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  • Parvez
    Jan 28, 2014 - 1:21PM

    PIA and Pak Steel………….should be FIRST to be sold. This sale smacks of desperation.

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  • Fareed
    Jan 28, 2014 - 1:29PM

    Don’t whine – you asked for it !!!!

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  • YP Mississauga
    Jan 28, 2014 - 1:36PM

    These companies are not private properties of PML(N) leaders. They are profit making companies and should be offered first to people of pakistan because tax payers money is invested in these companies.

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  • Tipu
    Jan 28, 2014 - 5:19PM

    National assets being sold to international bidders. Next round will be nuclear arsenal, installation, and then the Pakistan Army. Way to go Nawaz Sharif.Recommend

  • waheed
    Feb 3, 2014 - 3:08PM

    The people who are in fovor of privitization of OGDCL most probably dont know the facts and figures. the OGDCL is earning profit of more than 1.0 Billion $ per year and after completion of the ongoing projects the profit will increase considerably. OGDCL is paying approx 60 Billion Rs. as tax to Govt and the chare of profit is besides this amount. moreover, in case of any emergency i.e. war. this is the only source of your fuel locally if the same is handed over to IFC then you can immagine the condition they will create in emergency and also in normal conditions with your Gas for domestic supply. the organizations which are required to be off loaded which are going in loss are still retained by the Govt and in hidden the profitable organizations are being sold out. this is a life line organization and the whole nation will suffer but the time will not wait.

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  • Habib Ahmad Khan
    Feb 13, 2014 - 5:14PM

    Government should rectify their mistakes which they made and still making in management of those 31 assets of Pakistan than these organizations will give profit to Pakistan and economy will grow. Number of employees working in those organisations is much more than required because of bribery and due to many other factors so govt. should take an action to conduct audit on transparent basis than all the evils will be easy to remove and Pakistan and economic condition of every Pakistani will get improve. Privatisation is not the only solution. If govt. privatise these organisations then Govt. of pakistan is going to give the message to world ” we are not able to run our own country and can not handle our own assets” and the world wants the same to hear from us so please it is a request to our govt. to take such actions which can help for building of good image in the world.

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