The Federal Government has completed the required legislation to sell its stakes in two power plants to the United Arab Emirates (UAE) on a government-to-government (G2G) basis, revealed the sources from the Ministry of Finance.
Apart from the two power plants (Haveli Bahadur Shah and Baloki RLNG Power Plant), the government may also sell shares of Oil and Gas Development Company Limited (OGDCL) and First Woman Bank to the country.
Sources told Propakistani that the legislation will also help divest different loss-bearing State Owned Companies (SOEs), including distribution companies (DISCOs) and Pakistan Steel Mills (PSM).
After the new law comes into effect, government-level deals may be exempted from paperwork (PEPRA) rules. Sources expect the legislation to be exempted from Securities and Exchange Commission of Pakistan (SECP) rules, the Companies Act, and the privatization rules of Pakistan.
Previously, Finance Minister Miftah Ismail had expressed his disappointment regarding the privatization laws claiming that it was impossible to privatize entities under the regulations. He had said that Pakistan’s privatization laws were causing a great loss to the national exchequer, and they needed to be amended, allowing the government to sell its stakes in companies to foreign countries on a G2G basis. He had also pointed out that despite years of struggle, the government had failed to privatize DISCOs as well as other loss-bearing entities such as the Roosevelt Hotel.
Miftah Ismail had mentioned UAE’s interest to purchase the two power plants and shares of different companies during a press conference in July. He had quoted a price of $2 billion for the deal during the conference while counting the funds he could arrange to fulfil the International Monetary Fund’s (IMF) demand of financing the $4 billion external financing gap. However, the final price for the deal is yet to be finalized.
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