ISLAMABAD – The National Assembly Standing Committee on Privatisation was informed on Monday that the government would seek approval, regarding privatisation of power sector distribution companies (DISCOs), from the Council of Common Interests (CCI).
The Minister for Privatisation Waqar Ahmad Khan said that the government plans to offload shares of DISCOs on the local stock market. He said that a huge potential to sell energy sector shares exists at the local stock exchanges. However, optimising balance sheet of entities was needed. He maintained that the government plans to offload 16.5 shares of Islamabad Electric Supply Company (IESCO).
The Ministry of Privatisation, he added, was working on the evaluation of IESCO. He said that assessing a company meant gauging its cash flows and assets value. The Karachi Electric Supply Corporation (KESC) was sold only on the basis of cash flows. “We are working on assets of IESCO as it will help determine exact price of the company”.
Dr Donya Aziz of PML-Q said that government’s stance on privatisation was unclear, as various ministers had expressed reservations. The minister clarified that government had stated a policy on privatisation of public sector enterprises on public private partnership basis.
He said that DISCOs’ privatisation was delayed as approval from CCI is a legal requirement. He said recommendations for approval of DISCOs’ privatisation would be submitted for approval of CCI in the next meeting. The minister claimed that if the real price of IESCO was determined and it was sold on a good price; it would set a benchmark price for other power sector entities. “Loss making DISCOs would be restructured and privatised after a turn around,” he said.
On the proposed convertible or exchangeable bonds for the Oil and Gas Development Company Limited (OGDCL), he said that international markets have an appetite for such bonds. “The government was borrowing at 17 percent from the market and it can generate $1.0 billion for a five years period, at five percent, without any sovereign guarantee.”
