The Finance Bill for the FY 2020-21 has incorporated Rs. 100 billion privatization proceeds as part of the ‘Non-Tax Revenue Receipts’ for the FY 2020-21.
Federal Minister Mohammed Mian Soomro said this while chairing a meeting on Sunday and was briefed about ongoing transactions.
“The Privatization Commission is fully committed and endeavored towards timely achieving the target,” said Soomro. He said that significant progress is being made on various entities in the active privatization list.
The minister said that due diligence for various entities is in the final stage, likewise, the procurement process for the appointment of financial advisors is also at advanced stages for certain entities.
In a briefing by the transaction committee, the minister informed that for efficient implementation of the privatization program, PC is working on reforms including a computerized track record of the timelines to be kept for closer monitoring of transaction processes.
The officials briefed that standardization and simplification of procurement of transaction advisory services and transaction documents is being done to bring uniformity, consistency, and transparency in the privatization process and effective management of the transaction process.
As per the latest implementation plan prepared by the privatization division, it is expected that transactions for privatizing the Heavy Electrical Complex (HEC), both RLNG Plants: Haveli Bahadar Shah and Balloki is likely to be completed in the second quarter of the current financial year. For Nandipur Power Plant, Financial Advisors are hired, and due diligence of FA is in progress and is likely to be completed during the FY 2020-21.
Moreover, Services International Hotel (SIH), Jinnah Convention Center (JCC), SME, First Women Bank Limited (FWBL), and House Building Finance Company Limited (HBFC) are scheduled for the next FY for completion. For SME, qualified bidders have been notified to participate in buyer side due diligence leading to the bidding process.
The revival of Pakistan Steel Mills and to turn it into a profitable entity is one of the important agendas of the current government and Ministry of Privatization.
Another meeting was held for this purpose, attended by PC Board Member and all relevant stakeholders including Ministry of Industries and Production, Chairman Pakistan Steel Mills Board, Project Director, Financial Advisory Consortium, and Director General, Privatization Commission and other Members of the committee.
The transaction committee discussed the revised transaction structure for the revival of Pakistan Steel Mills. Different options were considered for revival and Financial Advisory Consortium was directed by the committee to further fine-tune proposals.
Another session of the Transaction Committee has been scheduled on Tuesday to finalize the Transaction Structure.
The recommendations of the Committee will be presented to the PC Board and Cabinet Committee on Privatization for necessary approvals.
Though conducive economic and market conditions will also be closely evaluated in order to ensure maximum privatization proceeds for the Federal Government from these transactions. Moreover, Policy and Legal reforms will also be an important landmark envisaged for the upcoming FY 2020-21; this is likely to shape-up and further streamline the privatization process.
A meeting of key stakeholders on the issue of Receivable & Payables by E-Electric was also held at Privatisation Commission, chaired by Minister of Privatisation and attended by senior officials from Power Division, Finance Division, CPPA, NTDCL, and Privatisation Commission. The representatives of Govt. of Sindh, SSGCL, and K-Electric also participated in the meeting through video link.
The meeting deliberated on the finalization of the Arbitration Agreement to settle the K-Electric Receivables & Payables from various Public Sector entities. Many important aspects of the arbitration agreement were agreed by the Stakeholders. For a few unsettled issues, it was decided to have a follow-up meeting next week.
It is also pertinent to mention that few privatization transactions including Divestment of up to 20% shares of Pakistan Reinsurance Co. Ltd, divestment of up to 7% shares of OGDCL, divestment of up to 10% shares of PPL, divestment of up to 20% shares of State Life Insurance Corporation divestment of 18.39% shares of Mari Petroleum Company Limited, Pakistan Engineering Co.(PECO), and Privatisation of Sindh Engineering Limited are temporarily on hold due to unfavorable market conditions, encumbrances and other pre-requisite formalities to address fundamental regulatory and legal issues pending with concerned ministries and management of the entities.
Moreover, the transactions which had to be halted during ongoing FY 2019-20 due to COVID-19 pandemic were ready to be completed as soon as the circumstances so warrant.
The auction of the Federal Government-owned 28 properties, earlier scheduled to be carried out in April 2020 will now be carried out as soon as the existing restrictions ease out and market conditions are deemed suitable.