Privatisation Commission to privatise 10 state-owned entities within a year

In a bid to save billions incurred in losses by the state-owned entities, the Privatization Commission (PC) has planned to privatise 10 loss-making entities within a year. 

According to the Commission’s timeline, the privatisation of Pakistan International Airlines (PIA) is expected by August 2024, while the sale of House Building Finance Company Limited (HBFCL) is targeted for completion by the end of July 2024. 

Additionally, the privatisation processes for the Roosevelt Hotel (RHC) in New York City and First Women Bank Limited (FWBL) are also in advanced stages.

As per a news report, out of the 24 entities set for privatisation, the 10 prioritised for completion within a year include Pakistan International Airlines Corporation Limited (PIACL), Roosevelt Hotel (RHC), First Women Bank Limited (FWBL), House Building Finance Company Limited (HBFCL), Zarai Taraqiati Bank Limited (ZTBL), Pakistan Engineering Company Limited (PECO), Sindh Engineering Limited (SEL), Islamabad Electric Supply Company (IESCO), Faisalabad Electric Supply Company (FESCO) and Gujranwala Electric Power Company (GEPCO)

In June 2024, the Privatisation Commission pre-qualified six parties as bidders for the PIACL privatisation process. The buy-side due diligence is underway, with bidding scheduled for August 2024. The terms and conditions of the Share Purchase Agreement are currently being finalized with the investor.

For HBFCL, the transaction is aimed for completion by the end of July 2024. The marketing of the Roosevelt Hotel’s privatisation will commence following the approval of the transaction structure by the federal cabinet. 

FWBL’s privatisation is proceeding under a government-to-government mode, in line with interest expressed by the UAE and subsequent cabinet decisions.

The privatization of Power Generation Companies (GENCOs) will be initiated in phases. The Power Division is considering carving out and privatizing efficient power plants (Combined Cycle) from GENCOs, rather than privatizing entire entities. Obsolete plants may be disposed of by the Power Division.

The Commission is also exploring options for Distribution Companies (DISCOS), including privatisation, long-term concessions, and retention. Out of 11 DISCOS, six have been recommended for privatisation, three for long-term concessions, and two for retention. The Power Division is hiring a technical consultant to provide timelines and complete prior actions in consultation with a technical advisor. 

The Cabinet Committee on Privatization (CCoP) approved in principle the privatization of 24 entities on May 10, 2024. Additionally, 41 entities have been referred to the Cabinet Committee on State-Owned Enterprises (CCoSOEs) for categorisation under the SOE Act Policy. Non-strategic SOEs will also be included in the privatisation program.