. .

Privatization in a big way

2001-2002 likely to prove eventful year — various transactions lined-up

Aug 27 - Sep 02, 2001

Dr. Hafiz Sheikh, Provincial Minister for Finance has rightly identified the hidden opponents as the major cause for delaying the process of privatization of the public sector units in Pakistan.

He was speaking at a seminar on "Pakistan's Privatization—Policy and Program" organized by the Mediators (Pvt.) Limited in Karachi recently. Saleem Altaf, Chairman Privatization Commission was the chief guest on the occasion.

Dr. Hafiz Sheikh, who generally speaks about the core issues without formalities said that the people whose interests are sure to hit as a result of privatization have unleashed various ill feelings against change of hands in the public sector units. They have fanned feelings that privatization may lead to increase in prices, unemployment or may cause security risks in case of sale of the strategic units. These hidden opponents either the ministers or the top bureaucrats are naturally afraid of losing their umpires they are enjoying to rule and serving their own interests. Citing the example of experience of a large number of countries, he said that dis-investment of the public sector units have proved a boon for economic growth of those nations. Because it has been proved that engaged in business is not the duty of the government. Let it be handled by the private sectors. It is amazing to note that the cliche of "strategic" speaks strange about the loyalty of the private sector of this country. Who has issued the certificate of loyalty or patriotism to the government servants and how any person in the government is entitle to raise finger about the loyalty of the people not in the government. Hence the term of "strategic" should be used after deliberation so that the people in the private sector do not feel hurt.

Saleem Altaf, Chairman Privatization Commission in his keynote address, however, announced the schedule for privatization of a large number of public sector units, which has already gone into process.

The Chairman conceded about the delay in the privatization process yet he justified it by describing that preparing ground for privatization is a time consuming process. The Privatization Commission he said was not sitting idle and has moved accordingly within the given circumstances. Change in the governments was also described as one of the reasons for implementation on the program. Now the process ensures a level ground for all the investors.

The P.C Chairman said that 16.6 per cent shares of MCB and 5 to 10 per cent shares of the National Bank of Pakistan would be offered to public through stock exchange in near future, probably during September. It may however be mentioned that the stock exchange formalities are however not made by the NBP so far. He also expressed the hope to bring 35 per cent shares of Pakistan Oilfields and another 35 per cent shares of Attock Refinery to the stock market by December this year. While the United Bank Limited and the PTCL would be placed for bidding in November. The Chairman disclosed that 11 investors have given expression of interest for PTCL and 21 investors have expressed their intention to buy the United Bank. The Privatization Commission will also call bids for nine oil and gas fields hopefully next month. The Commission has received 15 EOIs from USA, Canada, China, Oman, Malaysia, Netherlands, and Austria and also from Pakistan. The strategic sale of 58 per cent shares of National Investment Trust (NIT) is also to take place in October this year. Around 11 investors have expressed their intention to buy the strategic shares. The Commission is intended to appoint the financial advisor for privatization of Habib Bank. The largest financial unit may be taken to the market sometime in March-April 2002.

The Chairman also disclosed that the pre-qualification process for the sale of Pak-Saudi Fertilizers has also been completed and the bidding process may take place after the announcement of fertilizer policy, which is also due in near future. Pakistan State Oil (PSO) yet another large public sectors organization in the petroleum sector is also expected to be placed for sale at the end of the current year. Simultaneously, the Commission intends to invite the investors for purchase of 26 per cent or 51 per cent shares of OGDC in November or December this year. He said that the financial adviser was conducting to prepare financial and technical models for the transaction of the Karachi Electric Supply Corporation some times in April next year. Replying to a query, the chairman agreed it's the government policy to provide utilities at an affordable rate. Hence the preference will be given to the investors who ensures to supply power at cheaper rates to the consumers. This may be one of the pre-qualification for the intended buyers, he said.

Schedule for privatization of another 6 units of which he expects transactions next month are including Lasbella Textile, Flatties Hotel, PECO and National Power Construction while of Malam Jabba Resort and Javedan Cement in November. Steps are also being taken for early disposal of structure of Hyatt regency hotel, which presents an ugly look right in front of the Pearl Continental Hotel in Karachi. Dr. Mateen Thobani, Advisor to the Privatization Commission earlier spell out the working of the Commission.