ISLAMABAD - The PTI-led coalition government has failed to get any major success in privatisation in previous fiscal year as it could not privatise a single loss making public sector entity.

The government had projected to generate Rs100 billion from the privatization process in fiscal year 2020-21. However, the government could not get any major success in its sell-off plan of the PSEs. The Privatisation Commission had sold 23 properties of the federal government for Rs1.113 billion in last financial year. The government had received only Rs920 million against ten properties sold out of 23. Earnest money for remaining 13 properties was forfeited on account of the failure of the successful bidders to deposit the requisite amount.

Apart from selling these 13 properties, the PTI government could not privatise any PESs in 2020-21. It was the consecutive second year when the government failed to privatize any PSEs. Meanwhile, the officials of the Privatisation Commission informed The Nation that the government is simultaneously working on privatization of 18 or 19 public sector entities. “The process of privatisation is long due to the technical issues,” an official said. He further said that Covid-19 has also slowed down the privatization process. “There are several bottlenecks in finalising the transaction structures of the entities which are on the privatisation list”. 

Privatisation of some PSEs would be completed in ongoing fiscal year

He expressed hope that privatization of some PSEs would be completed in the ongoing fiscal year. The government is likely to accelerate the privatisation programme as it has projected to generate Rs252 billion from the privatisation proceeds in the current fiscal year. Finance Minister Shaukat Tairn had also announced that the government would accelerate the privatisation programme in few months. He said that 15 highest loss-making entities out of 85 would be handed over to a board within the Privatisation Commission comprising the people of highest calibre who would turn them around and divest 26 percent shares. 

The privatisation of SME Bank, First Women Bank Limited, Jinnah Convention Centre, House Building Finance Corporation Limited, and Services International Hotel is in advanced stages. The officials believed that government might complete the privatization of aforementioned PSEs in the first half (before December 2021) of the ongoing financial year. The government has also assured the International Monetary Fund (IMF) to complete the privatization of few PSEs in the year 2021-22. 

“Against the backdrop of Covid-19 and economic uncertainty, we have not been able to finalise the privatisation of two LNG power plants by end-FY 2020 as previously planned. We now expect to complete the process by end-February FY 2022, with proceeds still to be channeled to debt reduction and poverty programs,” the government of Pakistan said in documents. It further said that government is progressing with the privatisation of two small public banks and expect to complete these operations by end-December 2021.