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Many state firms to be privatised this year
From A Correspondent
PSO and Sui Northern Gas Pipeline are among the companies to be privatised soon
THE government is accelerating the privatisation process of state owned organisations and expects to complete a number of transactions during 2007-08. “We will be selling many state sector entities during the current financial year including the Pakistan State Oil company (PSO),” said Zahid Hamid, Minister for Privatisation and Investment in an interview with Khaleej Times. He said that some issues raised by the pre-qualified bidders of PSO were being addressed by the Privatisation Commission (PC) which is expected to complete the transaction soon.

He said that the PC was actively engaged with all the stakeholders to complete the PSO transaction. The minister denied that the parliamentary committee on defence had expressed its concerns over the PSO privatisation by saying that it was strategically a wrong decision and could expose the military supply line. He said that a number of transactions were expected to be finalised during the next few months starting with Global Depository Receipt (GDR) of Habib Bank Limited. “The HBL’s IPO will commence in July to be followed by GDR of Kot Addu Power Company (KAPCO).” Similarly, he said that strategic sale of Jam Shoro Power Company, Pakistan Machine Tool Factory (PMTF), Heavy Electrical Complex (HEC), Hazara Phosphate Fertiliser, National Power Company, Small and Medium Enterprise (SME) Bank, National Investment Trust (NIT), Cold and Salt Mines and 26 Hotels and Motels of Pakistan Tourism Development Corporation (PTDC) will be privatised during 2007-08. Asked about the disinvestment of Pakistan Petroleum Limited (PPL), Sui Northern Gas Pipeline Limited (SNGPL) and Sui Southern Gas Company (SSGC) Zahid Hamid said that their financial advisors were working out some remaining issues after which they will be put up for privatisation. He also said the government has decided once again to privatise Pakistan Steel Mills Corporation (PSMC) to a strategic buyer. “We are putting up for sale the country’s steel mills again and the process will begin with the issuance of Initial Public Offering (IPO) to be followed by its strategic sale to a potential investor,” he told Dawn. And the whole process, he pointed out, will be started within next few months time. “Steel Mills” transaction has started afresh as directed by the Supreme Court of Pakistan,” he added. The apex court had declared as invalid steel mills’ transactions on March 26, 2006 by saying that its privatisation was conducted in haste and in a non transparent manner. After the court’s decision, the minister said, the government took the matter to the Council of Common Interest (CCI) which reaffirmed the privatisation of the Mills on August 2, 2006 after having been reconstituted. The Council had originally allowed the mills’ privatisation on May 29, 1997.


Zahid Hamid
Responding to a question, he said that IPO of the mills will be conducted first as advised by the Supreme Court and that the whole process was expected to be finalised as early as possible. Asked about the investment, he said that the government was going to have an all time high over $6 billion foreign investment in 2006-07 against $3.9 billion of 2005-06.
He said it was the government’s consistent policies and level playing field that brought unprecedented foreign investment during the last financial year. He said over $7 billion foreign investment also included $2 billion portfolio investment, of which there were $1.5 billion GDR of OGDCL ($738 million) and UBL’s ($565 million). The private investment in the stock market, the minister for privatisation and investment said, was to exceed by end June 2007. “This is the most successful year in terms of privatisation proceeds,” he said adding that the total foreign investment was likely to exceed $6.5 billion in 2006-07. The total FDI by end May this year was to the tune of $4.2 billion. Giving the details, he said that 20 per cent foreign investment came in the manufacturing sector, 11 per cent in the oil and gas exploration, 33 per cent in telecommunication, 21 per cent in financial business, 3 per cent in power and 10 per cent in other services. He said 41 per cent foreign investment came from Europe which included 18 per cent from Netherlands, 17 per cent from China, 16 per cent from the United States, 11 per cent from the Middle East and 9 per cent from the UAE. The minister dispelled the impression that major foreign investment was attracted from the Middle East. Answering a question, he said that the biggest portfolio investment came from the United States, followed by the United Kingdom (33 per cent) and Singapore (15 per cent).