The Senate Standing Committee on Privatization, chaired by Senator Afnan Ullah Khan, held a meeting here at Parliament House on Friday to discuss the recent status of the entities included in the privatization list.
The Committee also reviewed the role and functions of the Privatization Ministry and its output over the years. Secretary of the Privatization Division, Hammad Ali Shamimi, briefed the Committee.
He apprised the Committee that the primary role of the division is to create liaison with the federal government on ministry affairs, including participation in Parliamentary business and Public Accounts Committees.
More importantly, the Privatization Division approved rules for the Privatization Commission to facilitate the privatization process. Secretary of the Privatization Commission, Usman Akhtar Bajwa, stated that the Commission is a corporate body.
He said the Commission comprised of a Chairman, Secretary and eleven members, primarily tasked with recommending privatization policy guidelines to the Cabinet and subsequently implementing the privatization program approved by the Cabinet.
He further highlighted that, as of now, there are a total of 24 entities on the privatization list. Pakistan International Airlines (PIA), the Roosevelt Hotel, and Zarai Tarqiati Bank fall under Phase-I of the privatization list.
More importantly, entities falling under Phase-I will be privatized within one year, while entities included in Phases II and III will be privatized in three and five years, respectively.
However, it is assumed that more entities could be added to the list after the completion of the Cabinet Committee on SOEs’ (State-Owned Enterprise) proceedings, which is being headed by the Finance Minister.
Senator Umer Farooq raised concerns over the inclusion of the Pakistan Minerals Development Corporation (PMDC) in the privatization list. He said PMDC could be made profitable and that the entity should not be privatized given its importance.
The Secretary of the Privatization Commission stated that the Petroleum Division had recommended the privatization of PMDC; however, the Cabinet Committee on SOEs is analyzing the matter and will finalize the fate of PMDC. The Committee decided to have an exclusive session on PMDC in the upcoming meeting.
Furthermore, the Committee expressed serious reservations about the privatization of Zarai Tarqiati Bank Limited (ZTBL). Senator Rana Mahmood ul Hassan maintained that farmers hold ZTBL very dear to their hearts, as it is the only institution providing some sort of relief to the dying agriculture sector.
He requested the Chairman of the Committee to invite the Farmers’ Association and ZTBL officials in order to highlight the importance of ZTBL to the farmers. The Committee decided to invite the relevant stakeholders to the next meeting.
The Committee also discussed the public petition put forward by seven Senators regarding WAPDA’s plan to sell eight operational plants as scrap. Officials stated that a total of nine power plants are included in GENCO holding companies.
The power plants falling under GENCO I to IV have not been operational for many years. However, the Nandipur and Guddu power plants, which fall under GENCO V, are operational.
The government has decided to sell the non-operational power plants under GENCO I to IV as scrap and include the operational plants in the privatization list.
However, Senator Ashraf Ali Jatoi maintained that GENCO Holdings had sold non-operational power plants at throwaway prices. The CEO of GENCO Holdings refuted the allegation and claimed that the process was carried out in a transparent manner.
The Committee directed GENCO Holdings to provide details of the amounts for which the power plants were sold and the companies that participated in the process.
While discussing the updated status of the privatization of PIA, the Secretary of the Privatization Commission stated that a committee has been constituted to engage investors, and it is hoped that the Privatization Commission will be able to attract more investors owing to International Monetary Fund (IMF) consent.
However, the transaction structure will remain more or less the same. The Committee recommended tightening the pre-qualification criteria to restrict non-operational bidders like Blue World from participating in the upcoming bid.