The minutes of the CCoP meeting have been endorsed by the Cabinet in its meeting on August 20, 2019 with the Prime Minister in the chair. Giving the background, sources said, Ministry of Privatisation briefed the CCoP meeting about the status of overall privatisation. The CCoP had approved privatisation of eight PSEs for active privatisation programme viz: (i) National Power Parks Management Company Limited (1,223 MW Balloki Power Plant & 1,230 MW Haveli Bahadar Shah); (ii) Mari Petroleum Limited (divestment of remaining shares); (iii) SME Bank Limited; (iv) First Women Bank Limited); (v) Services International Hotel, Lahore; (vi) Jinnah Convention Centre, Islamabad; (vii) Lakhra Coal Mines (now Lakhra Coal Development Company) and (viii) Pakistan Steel Mills.
Additionally, 41 PSEs were included in phase-II of privatisation program. Timelines for privatisation transactions were highlighted through the Gantt chart. It was contended that privatisation transactions take at least two years for completion due to its lengthy procedure. However, in order to accelerate the privatisation program, utmost efforts are being made to reduce time period for completion of privatisation transactions within two years to one year.
The Ministry of Privatisation presented implementation status in respect of PSEs on active privatisation program which is as follows:
1) SME Bank: the PC board in its meeting held on April 9, 2019 approved the appointment of Financial Advisor led by AKD Securities Limited to expedite privatisation of SME Bank. An agreement with FA was signed on June 18, 2019 whereas transaction kick-off was held on July 1, 2019. Due diligence has been initiated. The appointments of Board members and regulatory exemptions have been sought from Finance Division and State Bank of Pakistan.
2) Mari Petroleum: With respect to divestment of Residual GoP Shareholding (18.39 per cent) in Mari Petroleum Company Ltd, the sources said the Petroleum Division, on behalf of GoP, served the transfer notice to JV partners, on January, 23, 2019, as intention to sell/divest GoP's residual shareholding in PMCL. The prescribed procedure was not adhered to by the JV partners, and hence, the process became infructuous.
PC convened a meeting of the stakeholders on May 10, 2019 to resolve the contentious issue of Auditors' fee In line with the agreement reached in the meeting Petroleum Division on behalf of GoP re-issued the transfer notice to the JV partners on June 11, 2019. JV partners requested MPCL to provide Auditor's certificate for fair price guideline.
3) Services International Hotel, Lahore: PC Board on May 30, 2019 approved appointment of Financial Advisor led by Colliers Pakistan (Pvt) Ltd and an agreement was signed on July 10, 2019. Chief Secretary, Punjab requested for relaxation regarding limitation on high rise buildings at Shahrah-e-Quaid-e-Azam, Lahore.
4) Jinnah Convention Centre: Economic Coordination Committee (ECC) of the Cabinet on May 30, 2019 approved Rs 1.140 billion for payment to the CDA. Cabinet ratified decision on June 3, 2019. Expression of Interest (EoI) for FA published on June 28, 2019. 5) Lakhra Coal Development Company: LCDC stated that post 18th amendment to the Constitution, government of Sindh has not extended mining lease to the company. LCDC filed two cases for extension of mining leases in the Supreme Court of Pakistan. Date of hearing is still awaited.
6) First Women Bank: privatisation of First Women Bank Limited is likely to be initiated in October/November, 2019, as sequencing recommended by Finance Division/SBP. 7) 7) Pakistan Steel Mills (PSM): CCoP on June 17, 2019 listed PSMC in the privatisation list and further directed PC to immediately advertise for recruitment of a transaction advisor to bring in a party for the revival of the entity without transfer of full ownership. The CCoP also constituted a committee, comprising Minister for Privatisation and Advisor to PM on Commerce and Industries to review the progress and report to the ECC.
The EoI for FA was published in international and national press on July 13 and 15, 2019. The last date for submission of EoI was August 16, 2019. Ministry of Industries and Production has been requested for latest accounts of PSM. The management of PSM has hired international audit firm to complete the audit.
8) PIA: CCoP on February 31, 2019 directed PIA to complete feasibility study for appraisal of various management/financial options of Roosevelt Hotel, New York, by June 30, 2019. CEO PIA-IL is to submit requisite report by first week of August, 2019.
9) Power sector (Gencos and Discos): CCoP agreed on June 17, 2019 in principle to the future strategy/reforms regarding privatisation of Discos as proposed by the task force on Energy. It was also observed that privatisation of Discos cannot be shelved/put on hold for three years and directed the Task Force to present a viable plan for privatisation of one or two Discos. Moreover, Power Division was also directed to update the CCoP about closure/decommissioning of Gencos, which have outlived their recommended life.
Power Division has submitted update on the CCoP recommendations which show that nothing tangible has been achieved on the privatisation of power sector companies.
10) Oil and gas and mineral sector: the CCoP on October 31, 2018 and February 13, 2019, decided to carry out study regarding issues/claims of the provinces relating to GHPL, OGDCL & PPL in the light of 18th amendment. To formulate a plan for revamping of PMDC with the objective of turning it into a highly professional body, manned with leading professionals, having capacity of providing expert services where required by the federal and provincial governments to make presentation to this effect in the CCoP meeting but the report is still awaited.
11) Gas sector (SNGPL and SSGCL delisted): CCoP, on October 31 and February 13, 2019 directed Ministry of Petroleum to initiate work on creation of a regulatory framework for creation of a competitive market place for gas sector utilities and make a presentation to the CCoE. The report is awaited.
After detailed discussion, the CCoP headed by Finance Minister Dr Abdul Hafeez Shaikh grilled PC over slow progress of privatisation program and observed that in the current scenario, no transaction for privatisation of PSE will materialize in the near future.
The CCoP emphasized accelerating the privatisation transaction of approved PSEs. The CCoP directed Privatisation Ministry to initiate the process for hiring of Financial Advisors (FAs) collectively or separately as per requirement for selected PSEs and submit compliance report to the CCoP in its next meeting.
