It is heartening to note that the privatization programme has picked up in recent months after a serious jolt it received after 9/11 events followed by war against terrorism in our neighbourhood. The Privatization Commission successfully carried out many transactions including the major transaction of UBL during the last 3 months. UBL deal has not yet been finally okayed by the government but revised offer of Rs. 12.2 billion by MCB group for 51% share of UBL is likely is to be accepting.

It appears that the privatization programme is proceeding fairly satisfactorily despite the recent jolt the investment climate in Pakistan received from the suicidal terrorist attack on a bus in Karachi on May 8 resulting in the death of 11 Frenchmen and four Pakistanis besides serious injuries to 18 others. This inference is based on the improvement in the purchase price of 40 per cent stake in Badin-1 oil and gas field offered by BP Pakistan Exploration & Production Inc, UK & Occidental Oil & Gas Pakistan by $11 million over their earlier bid. The revised price of $143 million against the previous one of $131.5 million was successfully negotiated by a high level official committee which persuaded the bidders to improve their earlier offer to bring it nearer to the Privatization Commission reserve price.

Similarly, Attock Oil Company of UK also improved its earlier offer of $1.6 million for Turkwal oil and gas field to $2 million. Negotiations to this end were reported to be underway with the bidders of five other oil and gas fields to improve their offers from $42.89 million. Since the bidders in the above instance are foreign companies which are already operating as partner-owners, their readiness to improve their earlier bids is largely indicative of a favourable disposition of foreign investors to investment in Pakistan, specially in oil and gas exploration and development. Sale of fifty one per cent share of OGDC and PSO has also been advertise beside approval of sale of 5% share of National Bank. The cabinet committee on Privatization (CCoP) has also approved the privatization of the 12 mutual funds of the Investment Corporation of Pakistan with transfer of management to the intending buyers from the private sector. This will be the beginning of the proposed sell-off of the 25 Mutual Funds of the ICP in due course. There are stated to be quite a few enthusiastic groups of fund managers and investment companies which have shown interest in acquiring the Mutual Funds and their management control. It will not be out of place to point out here that the management of all the ICP Mutual Funds in the public sector was markedly commendable and as a result every new Mutual Fund which was offered by the ICP for public subscription has received excellent response from the general investing public. The rates of dividend being paid by the ICP against its Mutual Funds have been quite attractive ones. In fact the ICP Mutual Funds were considered as blue chips in the stock market and as such the weightage of ICP's operations in the stock market was fairly sizeable at around 12 per cent of the total transactions.

The major achievement was the sale of UBL which was put on the auction list since 1992. During this decade of uncertainty the bank suffered and losses mounted. The relevant government agencies must complete their diligence exercise at the earlier and finalise the deal as any further delay would not only damage the bank but also the whole process of privatization. After the sale of Muslim Commercial Bank and Allied Bank in the early nineties the then President, Ghulam Ishaq Khan, blocked the UBL sale after the Privatization Commission had received Expression of Interests. The second time around, the Benazir Government spurned the offer from Faysal Bank of Bahrain and an attempt was made to give it to a non-entity known as Basharahill of Saudi Arabia, who did not even have funds to submit a bid bond.

The continuous slide in the Bank's fortunes forced the State Bank of Pakistan to advise Benazir Bhutto that it needed to take over the institution. And she had to order the arrest of her own party member in the Assembly who was the Labour Union boss in order to overcome any resistance from within the bank. It goes to the credit of Nawaz Sharif government that it recognised the bank which had become insolvent and Rs. 22 billion were provided to it to maintain a semblance of capital adequacy. UBL was restructured and a forcible retrenchment, unheard of hitherto, was undertaken. The present government build up on the change and quite rightly decided to have it removed from government ownership as soon as possible. The revised offer of Rs. 12.2 billion of MCB group against 8.5 billion offered earlier seems reasonable under the present circumstances and should be accepted without any delay if other relevant issues are found to be satisfactory and transparent.

Now the major deal on the card is the sale of 26 per cent strategic shares of Habib Bank which was advertised by the Privatization Commission last month. The PC has received 'Expression of Interest" from 10 parties/groups which are under evaluation and scruitny at present of the commission experts. The privatization of this biggest and oldest bank of Pakistan may be completed within the next few months.