Pakistan Optimistic Despite Gloomy Global Outlook

KARACHI: Fears of a global economic slowdown propelled by China’s figures might have decreased investment appetite, but Pakistan is still hoping to get a good deal for its assets up for sale, said Privatisation Commission Chairman Mohammad Zubair.

“It’s a challenge. You don’t know when things will improve,” he told journalists on Saturday night on the sidelines of an event. “But we will have to take this challenge.”

Zubair, who returned from Washington last week after a roadshow to attract investment in power sector companies, said giants like General Electric (GE) were approached.

The government plans to privatise eight power companies with Faisalabad Electric Supply Company (Fesco) being the first in line.

As much as 74% stake would be sold to investors along with management control, he said. “While the government will keep a minimum stake to oversee company affairs and safeguard the rights of workers; anyone who comes into run it must have enough room to function independently.”

Privatisation of loss-incurring state enterprises has been delayed multiple times despite the continuous pressure from the International Monetary Fund (IMF).

In the government’s defence, Zubair said privatising companies, which are laden with legacy costs, was not an easy task. “It doesn’t happen overnight. The process takes at least 3 years from hiring consultants to financial planning and then marketing.”

Read: PC on Steel Mills privatisation

On the absence of interest from Pakistani investors in upcoming privatisation transactions, he said everyone would be given a fair opportunity to participate in the acquisition of companies.

“We shouldn’t create unnecessary controversies when that happens,” he said mockingly, adding that whenever local investors became part of a transaction there emerge talks of family silver being sold at a throwaway price.

Yet, industry people argue, that lack of interest has to do more with structural issues in power sector than any fear of controversy.

Inter-corporate circular debt, difficultly in collecting bills from consumers and energy mix, which is dependent on expensive oil, have marred performance of state-run power companies.

Change of heart on PIA

The proposed privatisation of Pakistan International Airlines (PIA) has been a thorny issue for the Privatisation Commission since 2013 when the PML-N government took charge.

On one hand, the airline had been seeking government guarantees and funding to acquire jets in a bid to restructure under an active management and on the other; its sale is being pursued vigorously.

Read: PIA pilots end strike on promise of new deal

Now it has become apparent that the government wants to restructure the airline to address the issue of legacy debt before a minority stake is sold to the shareholders.

While Zubair did not share any details on PIA, he said the airline’s board was near completing a proposal to restructure its loans.

Published in The Express Tribune, October 13th, 2015.

0 responses on "Pakistan Optimistic Despite Gloomy Global Outlook"

Leave a Message

About The CSS Point

The CSS Point is the Pakistan 1st Free Online platform for all CSS aspirants. We provide FREE Books, Notes and Current Affairs Magazines for all CSS Aspirants.

The CSS Point - The Best Place for All CSS Aspirants

September 2020
M T W T F S S
 123456
78910111213
14151617181920
21222324252627
282930  
top
Template Design © The CSS Point. All rights reserved.