The federal government has decided to privatize Telephone Industries of Pakistan (TIP) and Pakistan Telecommunication Company Ltd. (PTCL).
This was revealed before the National Assembly Standing Committee on Privatization which met with Syed Mustafa Mahmood in the chair. The committee was informed that the government has decided to privatize 49 organizations within the next five years, comprising of two phases.
TIP has become non-functional as its annual revenue has drastically gone down from Rs 700 million to about Rs. 20 million in the recent past, official sources revealed. TIP is a state-owned enterprise (SOE) currently running in losses and draining an average Rs 500 million a year in terms of salary support.
TIP has adequate land of 432 kanals, infrastructure, and skilled manpower but the current as well previous governments have failed to come up with any revitalization plans. It is currently on the privatization agenda of the federal government, the sources added.
The government of Pakistan has already privatized its 26 percent shares in PTCL. In June 2005, PTCL approved the sale of 26% B-class shares of PTCL to M/s Etisalat, and the Sale Purchase Agreement (SPA) was signed in June 2005. After approval by the Cabinet and the CCoP, a modified SPA was executed in March 2006, which incorporated certain amendments, including mutation of 3,384 properties in favor of PTCL with clean and clear titles.
As SPA, Etisalat made an upfront payment of $1.4 billion in April 2006 against the total bid amount of $2.598 billion. Whereas the balance payment of US$ 1.2 billion, to be paid in nine biannual installments, was contingent upon the transfer of 98% properties by January 2007 (First Shortfall) and 100% properties by January 2008 (Second Shortfall).
Pakistan and Dubai-based Etisalat are still holding talks to resolve much-awaited $800 million outstanding dues on account of PTCL privatization. The government has also added PTCL to its privatization agenda which, according to the officials, will materialize in the next five years.
Organizations to be privatized in the first phase (Spanning the next one and a half years):
1- SME bank Limited
2- First Women Bank Limited
3- 1223 MW Balloki Power Plant
4- 1230 MW Haveli Bahadur Power Plant
5- Mari Petroleum Limited (divestment of remaining shares)
6- Jinnah Convention Centre, Islamabad
7- Lakhra Coal Mines (now Lakhra Coal Development Company)
8- Services International Hotel, Lahore
Organizations to be privatized in the second phase:
1- House Building Finance Corporation
2- National Investment Trust Limited (NITL)
3- National Insurance Company (NIC)
4- Pakistan Reinsurance Company (PRC)
5- State Life Insurance Corporation (SLIC)
6- Oil and Gas Development Corporation Limited (OGDCL)
7- Pakistan Petroleum Limited (PPL)
8- Government Holding Private Limited (GHPL)
9- Pakistan Mineral Development Corporation (PMDC)
10- Faisalabad Electric Supply Company Limited (FESCO)
11- Islamabad Electric Supply Company (IESCO)
12- Lahore Electric Supply Company (LESCO)
13- Gujranwala Electric Power Company Limited (GEPCO)
14- Multan Electric Power Company Limited (MEPCO)
15- Peshawar Electric Supply Company Limited (PESCO)
16- Hyderabad Electric Supply Company Limited (HESCO)
17- Quetta Electric Supply Company Limited (QESCO)
18- Sukkur Electric Power Company (SEPCO)
19- Kot Addu Power Company (KAPCO)
20- Jamshoro Power Generation Company Ltd – JPCL (GENCO- I)
21- Central Power Generation Company Ltd – CPGCL (GENCO – II)
22- Lakhra Power Generation Company Ltd – LPGCL (GENCO – IV)
23- Northern Power Generation Company Ltd – NPGCL (GENCO – III)
24- PIA-IL (Roosevelt Hotel, NY & Scribe Hotel, Paris)
25- National Fertilizers Corporation, its units and subsidiaries
26- State Engineering Corporation, its units and subsidiaries
27- Heavy Electrical Complex (HEC)
28- Pakistan Machine Tool Factory (PMTF)
29- Pakistan Engineering Company (PECO)
30- Pakistan Industrial Development Corporation (PIDC) and its units
31- Sindh Engineering Limited (SEL)
32- Morafco Industries (Machinery as is where is basis)
33- Republic Motors Limited (RML)
34- Pakistan Industrial and Technical Training Centre
35- Export Processing Zone Authority
36- Port Qasim Authority (PQA)
37- Karachi Port Trust (KPT)
38- Pakistan National Shipping Corporation (PNSC)
39- Telephone Industries of Pakistan, Haripur (TIP)
40- Pakistan Telecommunication Co. Ltd. (PTCL)
41- National Book Foundation (NBF)