Privatisation of NPCC and HEC approved

The Cabinet Committee on Privatisation (CCOP) has approved the privatisation of “Transaction Structure of National Power Construction Corporation and Heavy Electrical Complex”. CCOP met here Friday with the Finance Minister Dr Abdul Hafeez Shaikh. CCOP allowed privatisation commission for the sale of minimum 88 per cent GoP shares in NPCC and divestment of minimum 96 per cent GoP shares in HEC together with management control. CCOP also agreed to the privatisation commission proposal and directed Pakistan Petroleum Limited Employees Empowerment Trust (PPLEET) to surrender bonus shares received by the entity-based trust to the privatisation commission.
The commission explained before the CCOP that under Benazir Employees Stock Option Scheme (BESOS), 50 per cent cash dividend was distributed among employees who received free of cost unit certificates while shares were retained by the respective trusts. Remaining 50 per cent dividend was transferred to the Central Revolving Fund (CRF) for subsequent payment of buy-back claims. The Scheme, as such, envisages 50 per cent cash dividend distribution to employees and not the distribution of 50 per cent shares including bonus shares to them.
The BESOS was designed as a special instrument, which operates under a dedicated framework approved by the federal cabinet for ensuring transfer of 12 per cent government shares to entity based trust, free of cost for a specific period while employees were given unit certificates in lieu of the shares retained in the respective trusts. These shares were subsequently transferred back to the government for buyback of claims of the beneficiary employees.
The CCOP constituted a sub-committee under the Privatisation Minister Ghaus Bakhsh Mahar to look into the details of remaining three to four recommendations made by privatisation commission.
The two entities approved for privatisation were Heavy Electrical Complex (HEC) and National Power Construction Corporation (NPCC). HEC located in Hattar Industrial Estate about 65 kilometres from Islamabad was one of the industrial units of State Engineering Corporation (SEC) engaged in the manufacturing of power transformers of different types with primary voltage rating of 66 and 132 KV.
The HEC undertakes repair and refurbishment of old and damaged power transformers up to 500 KV. It was incorporated as a private limited company in 1991 and commenced full-scale commercial operation in 1997. HEC was included in the privatisation programme in 2005. The HEC is spread over an area of 72.489 acres with six main manufacturing shops namely machine shop, winding shop, insulation shop, core shop, fabrication shop and assembly shop. In addition HEC has an oil purification shop, high voltage test laboratory equipped with 250 tonnes overhead travelling crane. It can diversify its manufacturing range by including other products such as instrument transformers, high voltage circuit breeders and other grid stations equipped for meeting demand of the products in domestic and foreign markets. The second entity NPCC approved by CCOP privatisation was established in 1974 under the Ministry of Water and Power. The NPCC was registered under the Companies Ordinance 1984 with its branch office in Saudi Arabia in the name of NPCC (Pakistan) Limited, registered under Foreign Capital Investment Regulations. NPCC undertakes execution of large power construction projects including high and low voltage lines, distribution networks and electrification of large housing and commercial projects on turnkey basis in Saudi Arabia.
Minister for Privatisation, Chairman Board of Investment, Secretary Cabinet Division, Deputy Chairman Planning Commission, Finance Secretary and other high officials were present in the meeting.