ISLAMABAD -  The government has decided to resume its privatisation programme to privatise loss-making Pakistan Steel Mills (PSM) and power generation and supply companies to reduce the losses of the power sector.

Privatization Commission’s (PC) Board meeting under the chair of Federal Minister for Privatisation Danyal Aziz has taken the decision to resume the privatisation programme. The government had stopped its privatisation programme after divesting the shares of profit-making institutions like Habib Bank Limited (HBL), United Bank Limited (UBL), Allied Bank Limited (ABL), Pakistan Petroleum Limited and National Power Construction Company. The government had generated $1.7 billion through privatisation since coming into power in June 2013.

Now, the government after a long time decided to expedite the process of privatisation. The PC board extended their approval to initiate next steps for the privatisation of SME Bank and Heavy Electrical Complex. It was hoped that privatisation of this entities would soon take place to facilitate the improvements required for the entities. The board also decided to work out a detailed plan to suggest way forward regarding hiring of the financial advisers to divest GoP shares in Mari Petroleum Company Limited.

The Privatization Commission’s board was apprised about the progress in proposed privatisation of PSM. The minister categorically stated that the government wants PSM to be privatised at the earliest, to put a halt to continued losses being accrued to the national exchequer. He explained the PC board about steps the government has taken to pay the salaries to more than 12,000 employees of the PSM. He explained the PC’s plan to settle the liabilities of PSM as approved by the PC board and Cabinet Committee on Privatisation, in consultation with Sui Southern Gas Company and National Bank of Pakistan. The board members extended their suggestions and assured PC of their continued support to resolve the issues, enabling PSM to be privatised at the earliest.

The prospects of privatisation of Pakistan International Airline Corporation Limited (PIACL) were also deliberated at length in the PC board meeting. The forum had a consensus on the point that privatisation of PIACL has become difficult in the wake of recent legislation that has barred from transfer of 51 percent GoP shares and management to the investors. It was decided that the government will be approached to clarify whether privatisation for PIACL is an option or not. If the government has an intention to privatise PIACL, then amendment in the current legislation will be proposed to kick-off the privatisation process.

The PC board was also informed about the volume and nature of losses being accrued in Gencos and Discos. The volume of circular debt has already reached Rs450 billion and is likely to rise more, making it all the more important to improve the efficiency of the power generation and distribution companies. After detailed discussion, it was decided that Privatisation Commission would seek approval of the government to privatize Northern Power Generation Company Limited (NPGCL), Faisalabad Electric Supply Company Limited (Fesco) and Islamabad Electric Supply Company Limited (Iesco) as strategic sale.

The Privatisation Commission board also discussed and adopted accounts in respect of the commission and constituted committees to resolve outstanding administrative and financial issues. Aziz briefed the forum on the various facets of Pakistan’s privatisation programme and deliberated on the government’s plans that are in the offing in the sector. Privatization Division Secretary Irfan Ali gave an overview of the privatization programme’s implementation status and PC board members provided their guidance to achieve the targets.

PC Chairman Danyal Aziz thanked the PC board members for their keen interest and detailed deliberations in key matters. He hoped that PC as an organisation and PC board members as part of the team would jointly work to steer the government’s privatisation agenda towards the right direction for achievement of goals of efficiency and stability in state owned entities. The meeting ended with the resolve to meet again in the near future to see the implementation of decisions taken in the meeting.