PC fails to achieve targets: SC verdict in PSM case further aggravates process

LAHORE - Almost all major transactions of the Privatisation Commission have been shelved with the only exception of SME Bank, and even the bidding of this financial institution has also been delayed for another four months, The Nation leant on Monday. As the government is yet to initiate the privatisation process, it is uncertain that it will achieve the set target of $744 million in this regard, sources said adding that not a single meeting of the Cabinet Committee on Privatisation (CCOP) has been convened even after the present government has completed 100 days in office. Sources further told the sale of Pakistan State Oil (PSO), Pakistan Petroleum Limited (PPL), Oil and Gas Development Company Limited (OGDCL), Sui Northern Gas Pipeline Limited (SNGPL), Sui Southern Pipeline Limited (SSGC), PTDC Motels and other entities has also been put on the back burner like that of the Global Depositary Receipt (GDRs) of Habib Bank (HBL), Kot Addu Power Company (KAPCO) and National Bank (NBP) on the pretext of market conditions at home and abroad. Sources said the investors, who had previously expressed their interest in these entities, were now considering pull themselves out of the process. They said the Board of Privatisation Commission, after induction of new members from the private sector, was unable to take any decision to proceed further keeping in view the Supreme Court's decision in Pak Steel Mills case. "It is almost certain that Privatisation Commission will not be able to meet the set targets of revenue generation given the fact that marketing and bidding process takes five to six months and the commission has not yet taken a single step in this regard", a source in PC observed, adding that it takes further two months to finalise the sale documents and close the transaction. Besides, further delays in the privatisation process are often caused as one has to wait for necessary regulatory framework and sectoral policies to be put in place. It was being expected that Syed Naveed Qamar having previous experience of privatisation would accelerate the pace of this process after assuming the office of Minister for Privatisation & Investment but contrary to that, the Privatisation Commission has so far failed to sell out even a single entity since the inception of the present democratic set-up. The government sources are of the view that since Syed Naveed Qamar is also looking after the Ministry of Finance, after the resignation of PML-N ministers he hardly finds any time to concentrate on privatisation and investment matters. They said the privatisation process is lengthy for major transactions, mainly to assure transparency in the process. After receiving CCOP approval for the privatisation, it typically takes about 18 months to close a major transaction, even when no major restructuring of the company is required. This includes about six or seven months to appoint a Financial Advisor and another three or four months for the FA to complete its legal, technical and financial privatisation strategy. When contacted, the Financial Advisor for SME Bank, BMA Capital, was unable to give any satisfactory reply for delay in SME Bank bidding whereas the sources said that certain issues between the State Bank and workers of the SME Bank could not be settled so far and would take more time.

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