RECORDER REPORT

ISLAMABAD: The government has set a privatisation proceeds target of Rs 50 billion for fiscal year 2015-16 while in the current fiscal year government generated Rs 177 billion through privatisation proceeds though the budget document displayed a typographical error and gave the amount at Rs 17.7 billion.

Chairman Privatization Commission, Muhammad Zubair told Business Recorder that the revised privatisation proceeds were Rs 177 billion and not Rs 17.7 billion, adding that he also pointed out the error in cabinet committee.

Talking about the downward target of privatisation proceeds for next fiscal year, he said that there was uncertainty as to how much money the government would be able to generate through strategic sale of Pakistan International Airlines, Pakistan Steel Mills (PSM) and other state-owned enterprises.

“Unlike the capital market transactions done in the current year, we do not know the market or the interest of buyers where we are going to float our strategic assets for sale”, he added.

He further explained that the Privatisation Commission has a plan to dispose of four DISCOs, CAPCO, National Power Construction Corp (NPCC), PIA, PSM, First Women Bank Ltd, Initial Public Offering of State Life Insurance Corporation. The capital market transaction of the shares of Oil and Gas Development Company Ltd would depend on global oil prices.

Pakistan Economic Survey 2014-15 revealed that the appointment of Financial Advisor (FAs) for privatisation of Islamabad Electric Supply Company (IESCO), National Power Generation Company Ltd. (NPGCL), NPCC and PIA has been completed. The process for appointment of FAs for remaining power sector companies has been initiated. Expression of Interest (EOL) for Acquisition of a minimum of 88 percent shares of National Power Construction (Pvt) Limited has also been launched.

On the privatisation front, PC has successfully concluded Capital Market Transactions, in 2014 i.e. UBL offering (fetching proceeds of –PKR 38,223 million, including foreign exchange of –US$315 million) & PPL Offering (fetching proceeds of –PKR 15,342 million) and in December 2014, ABL Offering (fetching proceeds of –PKR 14,440 million, including foreign exchange of –US$19 million). In April 2015, the Commission concluded one capital market transaction of HBL fetching proceeds of PKR 102 billion (including foreign exchange of US$-764 million). Strategic Sale of Heavy Electrical Complex is also expected to generate cash proceeds of Rs 250 million, besides clearance of its liabilities amounting to around Rs 850 million.