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ISLAMABAD: Pakistan’s Privatisation Commission on Wednesday gave the go-ahead to the privatisation of three state-owned entities, including the national flag carrier Pakistan International Airlines (PIA).
A meeting of the board of directors of the commission was held in the federal capital today to discuss the sale of the Heavy Electrical Complex (HEC), the National Power Construction Company (NPCC), and the divestment of a minimum of 26 per cent shares of PIA to a strategic partner.
The meeting was chaired by Minister of State, Privatisation Commission, Mohammad Zubair.
The board resolved to divest a minimum 26 per cent shares to a private investor and approved initiation process for the selection of a financial adviser for the purpose.
According to a press release, the board also resolved that “the employees’ interests shall be protected in the process.”
The commission’s board also approved the strategic sale of the Heavy Electrical Complex and the National Power Construction Company, and gave its nod to initiate the process for both the entities.
The privatisation of the national flag carrier has been a contentious issue fiercely resisted by opposition parties and worker unions in Pakistan.
A Senate committee on privatisation was informed by Finance Secretary Dr Waqar Masood Khan that the government was required to appoint a financial adviser for the privatisation by March-end under an agreement with the International Monetary Fund (IMF).
The finance secretary said the company had accumulated losses over Rs180 billion and, as part of a $6.64 billion IMF bailout package, the government was also required to privatise 26 per cent shares of the company by December this year.
However, Privatisation Secretary Amjad Ali Khan said the report of the financial adviser would determine if the privatisation could be carried out in 2014 or would be delayed for two years.
According to official documents presented to the IMF, the government has hired one financial adviser and will hire two more by March to offer minority shares in three companies in domestic or international markets by the end of June 2014 subject to investor interest and global market conditions.
Commission approves privatisation of PIA, other entities - DAWN.COM
Most crown corporations should be sold even at loss.just like KESC is now a taxpayer and no longer a burden on tax payers
Since The Private corporation took over KESC . Now 55% of the coverage area is exempted from any kind of load-shedding, while 5% places see shutdowns of only up to 3 hours a day.”
Industrial consumers, who pay a higher tariff, have completely been excluded from any kind of load-shedding as well. “Our recovery actually started from the elite areas in DHA where the loss was 24%.”
The KESC has distributed its network, running from Gharo in rural Sindh to Vinder in Balochistan, into ‘good and bad areas’. Depending on the bills’ recovery, it was decided which areas should suffer power breakdowns.
The management also went after rotten eggs within the organization, firing 1,400 workers found to collude with customers in electricity theft.
The transmission and distribution losses have come down to 27.8% from 35.9% in 2008-09.
Out of the box
Meanwhile, there are areas in Karachi like Baldia, Orangi, Gadap, Liaquatabad, Nazimabad and Korangi where KESC recovers only 40% of the billed amount. After all attempts to minimise losses failed, the company looked at the example of India where it is not unusual for private utilities to seek political help for bill recovery.
KESC replicated and outsourced two of the 11 high-loss areas to local politicians, who are responsible for the maintenance of power lines, check theft and recover bills.
In response to its advertisement, KESC received 44 applications from ‘influential people’ who thought they could help. As a test case, Gadap and a part of Organi Town has been handed over.
Gadap Town, where KESC employees would not dare enter places like Al-Asif Square, Gulzar-e-Hijri and Sohrab Goth, is being managed by a local Pakistan People’s Party (PPP) leader Hammad Khan Sherwani under a 80-20 revenue share arrangement. He has done the unthinkable.
“He is close to our breakeven point, which means almost 65% of the billed amount is being recovered,” added Gauhar. “We don’t even want 100% recovery from these low-income areas. A breakeven would do.”
This system has also raised some eyebrows as it could be viewed as a ‘badmash’ collecting bills.
A meeting of the board of directors of the commission was held in the federal capital today to discuss the sale of the Heavy Electrical Complex (HEC), the National Power Construction Company (NPCC), and the divestment of a minimum of 26 per cent shares of PIA to a strategic partner.
The meeting was chaired by Minister of State, Privatisation Commission, Mohammad Zubair.
The board resolved to divest a minimum 26 per cent shares to a private investor and approved initiation process for the selection of a financial adviser for the purpose.
According to a press release, the board also resolved that “the employees’ interests shall be protected in the process.”
The commission’s board also approved the strategic sale of the Heavy Electrical Complex and the National Power Construction Company, and gave its nod to initiate the process for both the entities.
The privatisation of the national flag carrier has been a contentious issue fiercely resisted by opposition parties and worker unions in Pakistan.
A Senate committee on privatisation was informed by Finance Secretary Dr Waqar Masood Khan that the government was required to appoint a financial adviser for the privatisation by March-end under an agreement with the International Monetary Fund (IMF).
The finance secretary said the company had accumulated losses over Rs180 billion and, as part of a $6.64 billion IMF bailout package, the government was also required to privatise 26 per cent shares of the company by December this year.
However, Privatisation Secretary Amjad Ali Khan said the report of the financial adviser would determine if the privatisation could be carried out in 2014 or would be delayed for two years.
According to official documents presented to the IMF, the government has hired one financial adviser and will hire two more by March to offer minority shares in three companies in domestic or international markets by the end of June 2014 subject to investor interest and global market conditions.
Commission approves privatisation of PIA, other entities - DAWN.COM
Most crown corporations should be sold even at loss.just like KESC is now a taxpayer and no longer a burden on tax payers
Since The Private corporation took over KESC . Now 55% of the coverage area is exempted from any kind of load-shedding, while 5% places see shutdowns of only up to 3 hours a day.”
Industrial consumers, who pay a higher tariff, have completely been excluded from any kind of load-shedding as well. “Our recovery actually started from the elite areas in DHA where the loss was 24%.”
The KESC has distributed its network, running from Gharo in rural Sindh to Vinder in Balochistan, into ‘good and bad areas’. Depending on the bills’ recovery, it was decided which areas should suffer power breakdowns.
The management also went after rotten eggs within the organization, firing 1,400 workers found to collude with customers in electricity theft.
The transmission and distribution losses have come down to 27.8% from 35.9% in 2008-09.
Out of the box
Meanwhile, there are areas in Karachi like Baldia, Orangi, Gadap, Liaquatabad, Nazimabad and Korangi where KESC recovers only 40% of the billed amount. After all attempts to minimise losses failed, the company looked at the example of India where it is not unusual for private utilities to seek political help for bill recovery.
KESC replicated and outsourced two of the 11 high-loss areas to local politicians, who are responsible for the maintenance of power lines, check theft and recover bills.
In response to its advertisement, KESC received 44 applications from ‘influential people’ who thought they could help. As a test case, Gadap and a part of Organi Town has been handed over.
Gadap Town, where KESC employees would not dare enter places like Al-Asif Square, Gulzar-e-Hijri and Sohrab Goth, is being managed by a local Pakistan People’s Party (PPP) leader Hammad Khan Sherwani under a 80-20 revenue share arrangement. He has done the unthinkable.
“He is close to our breakeven point, which means almost 65% of the billed amount is being recovered,” added Gauhar. “We don’t even want 100% recovery from these low-income areas. A breakeven would do.”
This system has also raised some eyebrows as it could be viewed as a ‘badmash’ collecting bills.
