Pakistan to privatise oil, gas and power units

The Pakistan government is expecting to earn $ 2 bn by privatising Karachi Electricity Supply Corporation (KESC), Pakistan State Oil (PSO), Oil and Gas Development Company Limited (OGDCL) and some other units by December 2002, says the privatisation minister. "And this $ 2 bn amount excludes the privatisation of Pakistan Telecommunication Company Limited (PTCL), whose evaluation is still to be done," Privatisation Minister Altaf M. Saleem said.
He said PTCL's earning would be additional, which otherwise could have given better price, had it been sold six years ago. Briefing reporters about the major transactions, he said that OGDCL's 51 % and PSO's 45 % shares would be offloaded within this year.

So far, the minister said, the government had earned $ 375 mm, which also included the amount of oil fields, disinvested recently by the government. Responding to a question, he said that no decision had so far been taken to give the billing department of KESC to the private sector.
Mr Altaf also said that statement of qualifications (SoQs) had been received from Orascom of Egypt and Saudi Ojer Group (Rafiq Hariri of Lebanon) for the disinvestment of 18 to 26 % strategic shares of PTCL along with the transfer of management. Another party -- Turk Cell of Turkey -- did not deposit SoQs, therefore, only two parties will be contesting for PTCL.

Talking about UBL, he said the State Bank was evaluating the MCB's highest bid of Rs8.5 bn, and the decision in this regard was expected. The minister said the Privatisation Commission had not kept any reference price for UBL but would like to get as much as possible out of the final deal. Nevertheless, he made it clear that no buyer will be allowed to get UBL by depositing the depositors' money. "The central bank's rules are very clear in this behalf."
The capital adequacy requirement of UBL has been completed to make the deal ready for the privatisation. During the last 10 years, Rs 30 bn had been injected into UBL, including Rs 22 bn by the Nawaz Sharif government, he added. After UBL, he said Habib Bank's 26 % shares would be offloaded by December this year for which a lot of response had been shown by the local and foreign investors. He told that there was no delay in the privatisation of Pakistan State Oil, and that it was lined up for this year as well.

The minister said that so far no decision had been taken to privatise the Sui Northern Gas Pipeline Limited (SNGPL) by unbundling it on the pattern of Wapda. He said the Asian Development Bank was providing necessary technical support over the issue.
To a question, Mr Altaf said as per the government decision 90 % sale proceeds of the privatisation were being spent on retiring debt, while 10 % were being used for poverty alleviation. "The whole system is transparent and everybody can check it," he said, adding that annual expenditure of the Privatisation Commission had also been reduced to Rs 400 mm.