The Standing Committee on Privatization, chaired by Senator Afnanullah Khan, was informed on Thursday that the Gaddu Power Plant and Nandipur Power Plant are ready for privatization, while the process for privatizing three electricity distribution companies (DISCOs) is currently underway.
During the meeting, Privatization Adviser Muhammad Ali briefed the committee that inactive assets of the DISCOs would be separated as part of the process. He said expressions of interest (EOIs) would be issued in January and the three DISCOs were expected to be privatized during the coming year.
Muhammad Ali told the committee that there was also an option to hand over the DISCOs to the provinces, adding that provinces would be offered participation at the bidding stage.
However, he questioned the purpose of transferring entities from one government to another, stating that the private sector responds more effectively to losses, unlike the government, which does not feel the same pressure. He expressed confidence that private-sector management would improve the performance of the DISCOs.
The committee was also briefed on the privatization of Pakistan International Airlines (PIA). Muhammad Ali informed the members that 75 percent of PIA shares were being sold, while 25 percent would remain with the government. He said that upon the sale of 75 percent shares, the government would receive 7.5 percent income, while 92.5 percent of the proceeds would be invested back into PIA.
According to the briefing, privatization of PIA ranging from 51 percent to 100 percent shares is being carried out, and final agreements with bidders on commercial terms are to be concluded. Final negotiations with bidders are expected to be completed by tomorrow, after which bidders will be required to accept the draft agreements.
The committee was told that bidders would have to deposit earnest money of Rs2 billion before participating in the bidding process. It was further stated that around 92 percent of the funds generated would be reinvested in PIA.
Officials informed the committee that PIA is facing a financial shortfall of Rs80 billion over the next two years and is in urgent need of funds, stressing that investors would be required to inject capital into the airline. The bidding for PIA is scheduled to be held live on December 23.
Reporter: Waqas Azeem