Cabinet Committee on Privatization approves privatization of five SOEs

Lahore : The Cabinet Committee on Privatization (CCoP) on Wednesday approved proposal of Privatization Commission to divest five State Owned Entities (SOEs) in the first phase.

The CCoP which met here under the chairmanship of Finance
Minister Asad Umar here approved the divestment of SME Bank Ltd,First Women Bank Ltd, Jinnah Convention Centre, Islamabad, Lakhra Coal Mines (now Lakhra Coal Development Company), and Services International Hotel, Lahore.

The committee also gave go-ahead to Privatization Division
to undertake the process for privatization of newly established 1233 MW Balloki Power Plant and the 1230 MW Haveli Bahadur Power Plant.

The committee also decided not to privatize the Printing
Corporation of Pakistan and Trading Corporation of Pakistan. However,the relevant ministries were directed to submit proposals for improvement in their working along with plan for disposal of their non-essential fixed assets.

After detailed deliberations, it was decided to delist Pakistan Steel Mills, PIA, Pakistan Railways, Utility Stores Corporation, NHA and CAA from the privatization list.  Ministry of Industries was directed to put up an action plan for operationalization of Pakistan Steel Mills within 45 days.

Similar instructions for improvement and revitalization of
other entities were given to the relevant ministries. In the case of
CAA it was noted that the Authority performed a regulatory function and could not be privatized.

During the meeting, the Secretary Privatization Commission
made a detailed presentation to the committee on the Privatization
Program pursued by the government over the last two decades.

The committee discussed the objectives and rationale of the
Privatization Program. It was noted that only one entity was
privatized during the last five years, apart from divestment of
shares in a few already privatized entities.

The committee noted that the listing of a large number of
entities on the privatization list for more than a decade had been
detrimental to their operations as these were neither privatised nor
any serious effort was undertaken to revitalize them.

The committee also directed the ministry of industries to
carry out a detailed review of all the entities in its purview, and
make recommendations for their revival or privatization. Ministry of Commerce was similarly directed to review the insurance/ reinsurance sector and make recommendations.

In the case of gas sector utilities the CCOP decided that
privatization of these entities should could not be undertaken before putting in place a regulatory regime to create competitive market place.

The committee directed the ministry of petroleum to take
necessary action in that regard.

Regarding financial institutions it was decided to delist
National Bank of Pakistan. Delisting of IDBP was also approved as the process for its winding up was already underway. In case of HBFC and NITL, Ministry of Finance was directed to submit recommendations for their retention or removal from the privatization list.

The committee also directed the Privatization Commission to
ensure complete transparency in all its transactions.

The finance minister maintained that the process of
divestment was meant to encourage and attract private sector
partnership to turn around ailing PSEs by injecting capital,
modernizing through technological upgradation besides introducing best corporate practices.