CONCEPT OF PRIVATISATION CHANGED TO PUBLIC PRIVATE PARTNERSHIP TO BENEFIT FROM EFFICIENCIES -Syed Naveed Qamar

Islamabad, September 29, 2009

In order to benefit from the efficiencies of experienced management and to have better impact on the country’s economy the government has changed the concept of privatisation to Public Private Partnership. Syed Naveed Qamar Federal Minister for Privatisation, Petroleum & Natural Resources stated during a briefing on, “Role of Privatisation Commission” to the delegates of National Management College here today.

The Minister said that involvement of Public Sector employees in the privatisation process was being ensured under the instructions of the President Asif Ali Zaradri by implementing, “Benazir Employees Stock Option Scheme” BESOS, which would benefit more than 500,000 employees of around 80 entities to the tune of financial impact estimated as Rs.116 billion and expected to further increase with the growth of the market. The government has reserved 12 % of the government shareholding in the State Owned privatised or non-privatised Enterprises, he informed.

He said that we were going ahead aggressively to implement BESOS in the SOEs with great momentum to make workers as partners in the future of Pakistan. The BESOS is being implemented by the Privatisation Commission in coordination with the line Ministry / holding corporation / respective SOE.

Elucidated the salient features of the new privatisation policy, Syed Naveed Qamar said that now privatisation would be conducted in Public Private Partnership (PPP)/ Joint venture mode for 26 % of the equity stake along with transfer of management while safeguarding government interest through protective covenant. Government would continue to ensure that divestment does not result in alienation of national assets and reduction in quality production and service the detriment of its people, he added.

He further stated that the new privatisation policy would enhance value of GoP shareholding, through management and technology transfer, creation of new assets, increase investments, maximize profits, modernize, expand and up grade the State Owned Entities (SoEs).

Giving an overview of the performance of the Privatisation Commission, the Minister termed Pakistan’s privatisation program as most successful in South Asia, Central Asia and the Middle East with the privatisation of 167 transactions worth over US $ 9 billion (Rs.476,421 million) which included 100 % SoEs in the chemical, textile, nitrogen, fertilizer, rice, roti, light engineering while 98 % automobile industry, 96 % ghee mills and 100 % units of Phosphate fertilizer. The 80 % of the Banking industry privatised substantially.

Certain transactions undertaken during Musharraf regime remained controversial for different reasons among them KESC was one of them, which was badly handled by the management having no experience and expertise to run the utility, however, it was still struggling to improve, he commented.