Profitable SOEs are deleted from the sales list

Profitable SOEs are deleted from the sales list

Deputy Prime Minister Ishaq Dar on Friday gave instructions to remove seven profitable companies, placed at the disposal of the Pakistan Sovereign Wealth Fund, from the privatization plan but included the Roosevelt Hotel, New York in the active privatization list.

Dar in his capacity as chairman of the Cabinet Committee on Privatization (CCOP) did not approve the proposed five-year privatization agenda. In the inaugural CCOP meeting, he found weaknesses in the categorization of 85 government-owned commercial enterprises and ordered the ministry to review the entire program.

The CCOP meeting was held a few days after the board of the Privatization Commission (PC) approved only 21 enterprises for sale while excluding the remaining 64 entities.

Dar asked to revise the entire list and bring all loss-making enterprises to an active privatization program. He disagreed with the proposed timeframe for the 21 entities approved for privatization by the board over the next one to three years.

In addition to the 21 entities, most of which are related to the energy sector, he added three more entities to the provisional list including the Roosevelt Hotel.

A statement issued by the PC said the CCOP was presented with a phased privatization program (2024-29) by the Ministry of Privatization.

The CCOP chairman directed officials to exclude seven highly profitable firms from the privatization list as they have been placed under the disposal of the Pakistan Sovereign Wealth Fund.

The firm’s profits will be used to start joint ventures with foreign countries. The Sovereign Wealth Fund Act 2023 exempts such firms from the purview of privatisation.

CCOP requested to permanently delete Oil and Gas Development Company Limited (OGDCL), Pakistan Petroleum Limited, Mari Petroleum, National Bank of Pakistan, Pakistan Development Fund, Government Holdings (Private) Limited and Neelum-Jhelum Hydropower Company from the privatization programme.

It also did not approve the transfer of OGDCL shares from the privatization ministry to the energy ministry due to the ownership of the company by wealth funds.

The CCOP considered the proposal to transfer 322.46 million shares of OGDCL from the PC account to the Ministry of Energy, according to the statement. However, the matter was postponed with instructions to the Law and Justice Division to examine the provisions of the National Wealth Fund Act 2023 and submit its recommendations to the CCOP.

The Express Tribune reported last week that out of 85 commercial entities, the ministry did not recommend privatization of 38 entities declaring them strategic and important.

Only 21 firms are recommended for privatization, of which 15 have been on the active privatization list for a longer period. The list of 21 has been increased to 24 but the approval remains provisional.

The CCOP, while approving the 24 entities, instructed the Ministry of Privatization to discuss the phased abolition of each entity in consultation with the respective ministries.

The privatization ministry said the CCOP decided that 40 state-owned enterprises (SOEs), which are categorized as strategic or important, will also be placed by their respective ministries before the Cabinet Committee on State-Owned Enterprises (CCOSOE) for their categorization.

These entities will only be considered as essential and will not be considered for privatisation, if the CCOSOE describes them as essential. SOEs that will not be categorized as strategic or important will be included in the privatization program.

Different ministries have declared SOEs like Pakistan Tourism Development Corporation, Pakistan Expo Center and SME Bank as strategic, which makes no sense.

Likewise, the CCOP instructed the Ministry of Privatization to discuss the rationale provided by the ministry for not including the 18 SOEs in the privatization list.

If there is no justification to keep them, the CCOP in the next meeting will decide to put all of them in the privatization program, according to a federal cabinet minister.

Among these 18 SOEs are Pakistan Textile City Limited, Pakistan Revenue Automation Limited, National Fertilizer Corporation, Pakistan Industrial Development Corporation, Pakistan Steel Mills, Pakistan Engineering Corporation, Pakistan Telecommunication Company Limited, Sui Northern Gas Pipelines Limited, Sui Southern Gas Company and Pakistan Railways. Transport Company.

With the above instructions, CCOP informs all ministries and divisions to take up their strategic and important SOE cases with CCOSOE at the earliest so that a comprehensive phased privatization program can be finalized in the next CCOP meeting.

The Cabinet Division has opposed the privatization of the Pakistan Tourism Development Corporation and the Pakistan Printing Corporation. The Commerce Division has opposed the privatization of Pakistan Reinsurance Company Limited, National Insurance Company Limited, State Life Insurance Corporation, Trading Corporation of Pakistan and Pakistan Expo Centre.
The ministry of communications opposes the privatization of the National Highways Authority and the Pakistan Post Office.

The Finance Division has opposed the privatization of SME Bank, National Bank of Pakistan, Industrial Development Bank of Pakistan, Pak-China Investment Company, Pak-Iran Investment Company, Pak-Libya Investment Company, Pak-Oman Investment Company, Pak-Kuwait Investment Company and Pak Investment Company -Brunei.

The Finance Division has also opposed the privatization of the National Investment Trust Limited.

The industry ministry disagreed on the privatization of the National Fertilizer Corporation, the Pakistan Industrial Development Corporation, the Pakistan Steel Mills, the Small and Medium Enterprises Development Authority, the State Engineering Corporation and the Utility Stores Corporation.

The IT Ministry has opposed further offloading of shares of Pakistan Telecommunication Company Limited.

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