PSM, PIA sell-off: PPP to move Senate against Privatisation Commission

Mandviwalla says PC chief has refused to answer queries

ISLAMABAD:

The Pakistan Peoples’ Party has decided to move an adjournment motion in the Senate against the Privatisation Commission (PC) after it refused to apprise a parliamentary committee about the privatisation of the state-owned Pakistan Steel Mills and Pakistan International Airlines.

The PC has also refused to cooperate in an ongoing parliamentary investigation into alleged wrongdoings in the failed privatisation attempt of Heavy Electric Complex (HEC), said Senator Saleem Mandviwalla of the PPP who is the chairman of the Senate Finance Committee.



Against the government’s own financial advisor’s recommended price of roughly Rs1.5 billion, the PC board had approved to sell the HEC for Rs250 million. The Cabinet Committee on Privatisation subsequently endorsed the PC board’s decision.

The refusal of PC Chairman Mohammad Zubair, to appear before the Senate Finance Committee in its upcoming meeting scheduled for Thursday became a reason for the standing committee to take the matter to the upper house of Parliament, said Mandviwalla on Monday.

The meeting was convened to seek an update on the privatisation of PIA, PSM, and power distribution companies, according to a notice of the meeting issued by the Senate Secretariat. Mandviwalla said the meeting notice was issued only after additional secretary in-charge of PC, Ahmad Nawaz Sukhera, had agreed to the time and agenda of the meeting.

“The time has come to take action against senior officials of the PC and I have already written a letter to Senate Chairman Raza Rabbani,” said Mandviwalla while talking to The Express Tribune. It is now up to Senate chairman to take action against the PC officials, he added.

Whenever the standing committee invited the PC to brief the meeting on the ongoing privatisation of national strategic institutions like PSM, PIA, etc. it would present a false schedule, according to a statement issued by the office of Senator Mandviwalla.

Mandviwalla said it was not the first time that Zubair had refused to appear before the standing committee and its sub-committee that has launched an investigation into alleged wrongdoings in the failed attempt of HEC’s privatisation.

The PPP decided to take the PC officials to the Senate at a time when the Commission is facing criticism for its mishandling of PIA and PSM transactions – the entities that are on top of the privatisation list agreed between Pakistan and the IMF.

PIA’s privatisation got delayed after the PC came to know that the entity cannot be sold until its PIA Act of 1956 is amended by the Parliament. Similarly, the PSM transaction structure that the PC Board approved last week could not stand the scrutiny of the CCOP. Finance Minister Ishaq Dar found a major flaw in the PSM transaction structure, saving his government from a potential financial scandal of Rs33 billion.

The illustrative balance sheet of PSM, made available to The Express Tribune, showed that the financial advisor did not mention Rs33 billion deferred tax assets in the total assets of the PSM.  Zubair had told The Express Tribune that he wanted to use Rs33 billion as a marketing tool.

Published in The Express Tribune, October 6^th, 2015.