ISLAMABAD - IMRAN ALI KUNDI/MONITORING DESK - The board of directors of Privatisation Commission on Thursday approved to disinvest the shares of more public sector entities including Pakistan Steel Mills (PSM) and Oil and Gas Development Company Limited (OGDCL) which would generate more than Rs 150 billion revenue for the government.

The second session of the Board of Privatisation Commission was held with Chairman/Minister of State for Privatisation Commission Mohammad Zubair in chair. Apart from PSM, OGDCL, the board of directors also approved to disinvest the shares of Habib Bank Limited, United Bank Limited, Allied Bank Limited and Pakistan Petroleum Limited.

According to BBC, the board, among other matters, approved disinvestment of 51 percent shares of Pakistan Steel Mills in the capital market.

The Board also allowed the Commission to initiate process for hiring of Financial Advisers for the above mentioned entities and constituted transactions committees (TCs). Mohammad Zubair informed the board that government would ensure transparency in the process of privatisation. All stakeholders would be taken into confidence. The chairman also highlighted that government was sensitive to the employees’ reservations and their rights would be protected.

Sources informed that government had shares in Habib Bank Limited, United Bank Limited and Allied Bank Limited, which would be disinvested in the capital market. The government is expecting to generate over Rs 150 billion revenue from the capital market transactions. The authorities are estimating a minimum Rs80 billion gains from 10 percent sale of OGDCL shares, Rs20 billion by offloading 5 percent shares of Pakistan Petroleum Limited, Rs15 billion from 10 percent shares of Untied Bank Limited, Rs50 billion by offloading 20 percent shares of Habib Bank Limited and Rs10 billion by offloading 10 percent shares of Allied Bank Limited.

It is worth mentioning here that government has initiated the process of privatisation of 31 public sector entities as committed with international monetary fund for loan programme worth $6.64 billion. The board of directors of the privatisation commission on the first day (Wednesday) had approved the disinvestment of 26 percent shares of Pakistan International Airlines (PIA) and sale of heavy electrical complex (HEC) and sale of National Power Construction Company (NPCC).

The board members including Arsala Khan Hoti, Nasiruddin Ahmad, Zafar Iqbal Sobani and Secretary Privatisation Commission attended the second day meeting.   According to BBC, the board also decided to offload 51 percent shares of Islamabad and Faisalabad electric supply companies. It merits mentioning here that then government in 2006 had started the process to privatise PSM and a consortium of Russian, Saudi and Pakistani private companies had got its 75 percent shares by giving highest bid of Rs 21.67 billion. However at that time, Supreme Court of Pakistan had declared the sell-off of PSM illegal and thus the process could not be completed.

Established with the technical and monetary support of Russia, the PSM has been one of the major projects of Pakistan. However, for the last few years, the entity was going in deficit. The previous government, to save it from bankruptcy, had also given a bailout package to the PSM. 

On Wednesday, the board of directors approved privatisation of three public-sector entities, including disinvesting 26 percent shares of Pakistan International Airlines (PIA), to a strategic investor and initiation of the process for hiring of financial advisers in this regard.  Chairman/Minister of State for Privatisation Commission Muhammad Zubair chaired the first meeting of the board. The board also approved privatisation of two other entities, National Power Construction Company (NPCC) and Heavy Electrical Complex. “The Privatisation Commission’s board has directed initiation of the process of both the entities, NPCC and HEC,” said an official statement.