ISLAMABAD - After facing delay in its plan of privatising public sector entities, the federal government on Thursday decided to resume the process of privatising Pakistan Steel Mills and power sector companies including Kot Addu Power Company Ltd (KAPCO).

The Cabinet Committee on Privatization (CCoP), which met under the chair of Finance Minister Ishaq Dar, also allowed Privatization Commission to initiate process for listing of shares of qualified Discos on the stock exchange through Initial Public Offering (IPO), starting with FESCO and IESCO. It was decided that government would retain the control of companies as well as management.

It is worth mentioning here that Pakistan has committed with the International Monetary Fund (IMF) to move ahead with an IPO for a minority share in FESCO by November 2016 to be followed by IESCO and LESCO.

The Committee had discussion on the proposal regarding restructuring of Pakistan International Airlines Corporation Limited (PIACL) and desired that its decision of 7th May 2016 may be fully implemented. The decision called for completing the corporatization process of PIACL and finalizing the matter regarding separation of core and non-core business.

Following the fresh benchmark of the IMF, the CCOP also approved divestment of government's residual shareholding in Kot Addu Power Company Ltd (KAPCO). Under an agreement with the IMF, the government will give an advertisement by July 15, 2016 to invite Expressions of Interest (EoI) from prospective bidders for selling its remaining shares of KAPCO, which has a power generation capacity of 1,600 megawatts. Accordingly, all of GoP's stake in KAPCO held via WAPDA will be divested which comes to 40.25% of issued share capital, amounting to 354,311,133 shares. Further, the transaction will be executed as a strategic sale to the qualified bidder.

The CCoP held detailed deliberations on financial and administrative situation prevailing in the Pakistan Steel Mills (PSM). It was observed that despite massive efforts, there had been no serious engagement by the Sindh government on the offer made by the federal government to acquire the PSM. The CCOP therefore allowed Privatization Commission to go ahead with the plan for divestment of PSM following due process.

The Sindh government could not take decision on acquiring PSM in ten months. The PSM issue is pending between federal and provincial governments from October 2015 when Cabinet Committee on Privatization decided to offer Sindh to acquire the Mills with all assets and liabilities.

However, some of the conditions of the province were not acceptable for the center, as Sindh asked for sharing Privatization Commission's financial advisor's technical and financial due diligence reports, restoring gas supply to PSM to avoid permanent damage to PSM and sharing an appropriate 'incentive package' for the revival of the national asset.

However, after CCoP approval, the federal government would seek foreign investors for the privatisation of non-operational Pakistan Steel Mills (PSM).

Finance Minister on this occasion directed that principles of transparency must be ensured in the divestment process.