Auditor General of Pakistan (AGP) has recommended changes to how Privatisation Commission selects buyers for privatisation of state-owned enterprises, calling for revisions in bidder pre-qualification rules.
Audit officials raised issue during a Public Accounts Committee (PAC) sub-committee meeting that examined Ministry of Privatisation audit reports for FY2010-11 and FY2013-14, arguing bidder technical competence should carry more weight than immediate financial offer.
An official of Public Procurement Regulatory Authority backed audit position and said technical competence should be given more weightage than financial valuation, according to meeting details.
Committee also asked Privatisation Commission to review Privatisation (Modes and Procedure) Rules, 2001, saying rules need more clarity at implementation stage, while audit flagged procedural issues in past privatisations including Kot Addu Power Company, Javedan Cement, Mustehkum Cement, Faletti’s Hotel, and Pak American Fertilizer Limited.
Audit said privatisation record for Javedan Cement did not include a pre-qualification process aligned with financial, operational, and technical aspects, and that only earnest money submission was used as a qualifying condition for bidding.
In Mustehkum Cement case, audit cited a similar approach where bidders were directed to deposit earnest money and only a limited number qualified by due date.
Privatisation Division told committee transactions were carried out under laid down rules and after approvals by relevant forums, and said past deals generated market-based revenue for government.
Audit also raised issue related to Kapco privatisation, referring to an escrow arrangement and reconciliation of stores, spares and fuel stocks, and said record gaps remain on the matter.
