ISLAMABAD: After multiple failed attempts to sell Heavy Electrical Complex (HEC) during the past 20 years, the government has moved forward to delist the complex from privatisation process. Ministry of Industries and Production, through a summary, has suggested the cabinet division to exclude the HEC from privatisation process saying that the indigenous factory which manufactures power transformers, is performing well.
According to reliable sources at the ministry, the cabinet is likely to approve the summary saving the electrical complex from going into private firms’ hands. The government was reconsidering the privatisation process since the public-sector entity has become profit-earning and is starting to overcome its losses.
The government was going to save the HEC after four to five attempts of selling off the complex during the past 20 years when it was first listed for privatisation in 1997. The last attempt was the sale of HEC to Cargill Holdings Limited in 2016. In a negotiated sale, it had agreed to sell the company at a meagre cash price of Rs 250 million to Cargill Holdings, however, the deal was cancelled after the Rs 225 million cheque submitted by the bidder was dishonoured. The Privatisation Commission (PC) board has already revoked the deal with Cargill Holdings, confiscating the Rs 25 million earnest money and registering an FIR against Cargill Holdings Adviser Sabur Rehman for dishonouring the cheque. Rehman went to court against the PC but the Islamabad High Court dismissed it.
An official of HEC, in terms of anonymity, told Pakistan Today that the ministry of Industries and Production was requested to hold back the electrical complex as it was the only public industrial unit to produce power transformers. The progress shown by the HEC was very encouraging.
According to him during the past two years, HEC has managed to improve its performance and it is no more incurring losses. The decision to privatise HEC had been taken even before the company commenced commercial operations. It has been on the active list of privatisation since 1997. This caused many operational difficulties in running the company in a professional manner, as successive governments did not pump in money.
The complex, which has the capacity of producing transformers worth Rs 4 billion and distribution of the transformers worth Rs 12 billion, started facing problems when the agreement signed with WAPDA for the purchase of 70 per cent transformers from HEC was not implemented. The bifurcation of WAPDA into discos and gencos and subsequent negligence of heads of these companies had caused losses to HEC.
It was feared that in case the private firm could not run the complex after privatisation, the entire complex would be finished depriving the country of its indigenous industry. “Unfortunately, the policies of the country have been entirely relying on imported goods instead of focusing its own manufacturing industries and units,” said the sources.
It may recall here that National Assembly Standing Committee on Industries and Production had also previously opposed the government’s plan to privatise HEC, Haripur. The committee in its report had claimed that the net profit of HEC in 2015-16 was Rs 100 million and it was not possible to wipe out all of the entity’s losses in a couple of years. Therefore, there was no reason to privatise it.
The Cabinet Committee on Privatisation (CCOP), chaired by former minister of Finance Ishaq Dar had authorised the Privatisation Commission to sale the HEC.