Rebuttal to Nation Article of 11 December


In his article in "The Nation" dated December 11, Mr. Bajwa suggests that there has been a "quiet shift in govt's privatisation policy" from the strategic sale of shares (i.e. with management control) to minority share sales via the stock exchange. The Privatisation Commission would like to clarify that neither the Government's commitment to privatisation nor its policy on the mode of privatisation has wavered.

In the aftermath of September 11, several large strategic transactions with foreign interested parties that were to come up for bidding during the last quarter of 2001 have been postponed by three or four months at the request of some of potential bidders and/or at the advice of the Financial Advisor. These include PTCL, Government's working interest in nine oil and gas fields, United Bank Limited, National Power Construction Company, Pak Saudi Fertilizers and the Hyatt Regency and Faletti's hotels, the vast majority of which are expected to be offered for bidding in the first quarter of 2002.

Others have been offered or are being offered for bidding with little or no delays. These include the LPG assets of SNGPL, where the sale was agreement signed in October, Lasbella Textile Mills, the meter manufacturing unit of SSGC, and minority share sales of National Bank, where 27,000 applications were received, and Muslim Commercial Bank, all of which were offered for bidding in November. Similarly, bidding for PECO Badami Bagh, and Bolan Textile Mills, are expected to occur in January, roughly on schedule.

Preparation for the larger units that were expected to be bid during the first half of 2002 is also largely on schedule, with minor delays due to restrictions on financial advisors in travelling to Pakistan (PSO, OGDC and KESC) and difficulties in hiring financial advisors because of the regional situation and travel restrictions (Habib Bank, Sui transmission and distribution companies, Jamshoro, and FESCO).

The Privatisation Commission is likely to offer minority shares via the stock exchange in coming months in companies such as Pakistan Oilfields Limited, Bank Alfalah, and Pak-Saudi fertilizer. However, this was always envisaged in the privatisation policy and has no connection with the planned strategic sale of shares in companies such as PTCL, OGDC, PSO, Pak-Saudi Fertilizers, the Sui gas companies, or KESC.

In short, despite some delays due to the regional situation, the government's privatisation programme is on track, with several major companies to be offered for sale during the next six months.