The Cabinet Committee on Privatization (CCoP) on Friday did not agree to the proposal from Earthquake Reconstruction and Rehabilitation Authority (EERA) for delisting of its 17 properties from the 32 assets being processed for sale by Privatization Commission. The CCoP also directed for expediting the pace of work on privatization of Small and Medium Enterprises (SME) Bank Limited as well as the PIA Investment Limited said a statement issued by Ministry of Finance.
The Cabinet Committee on Privatization (CCoP) meeting held under the chairmanship of Adviser to Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh. The CCoP also took up privatization of SME Bank Limited as decided by an earlier CCoP meeting in October last year, and approved a transaction structure, submitted by Privatization Commission for the privatization of the bank.
Earlier, the CCoP was told that the transaction structure had been reviewed and recommended by a transaction committee constituted by the Privatization Commission and comprising PC Board Members, Finance Division, State Bank of Pakistan and SME Bank which met four times before coming up with a comprehensive transaction structure put to CCoP for consideration and approval.
The Privatization Commission also shared with the CCoP the pre-qualification criteria reviewed and approved by the PC Board for the prospective bidders. The CCoP also discussed privatization of PIA-Investment Limited and approved a proposal for the constitution of a task force to examine and process all necessary formalities for an early disposal of the PIA properties, including the Roosevelt Hotel in New York and Hotel Scribe in Paris.
Under the decision, the task force would be headed by Privatization Commission Minister Muhammad Mian Soomro and include Special Assistant to Prime Minister on Overseas Pakistanis and HRD Syed Zulfiqar Abbas Bukhari, Secretary Privatization Commission and Additional Secretary Ministry of Finance as well as legal and financial consultants on the Roosevelt Hotel Corp and any other official deemed necessary to be co-opted by the Task Force.
The CCoP also instructed the PIA Management to present to the CCoP in its next meeting the findings of the feasibility study conducted by it in pursuance of a CCoP decision earlier this year to carry out an appraisal of various management and financial options for gaining optimal returns from the Roosevelt Hotel.
The CCoP also directed the PIA management to update the Committee on monthly basis regarding the progress of the work and also advised the airline management to carry out its plan in coordination with Aviation Division. The CCoP took up a proposal from Earthquake Reconstruction and Rehabilitation Authority (EERA) for the delisting of 17 properties until June 2020 when the EERA would be subsumed into the National Disaster Management Commission (NDMC) as per a government decision already taken to transform National Disaster Management Authority (NDMA) into a vibrant and self-sufficient entity.
The EERA was of the view that deferring the privatization of its assets till June 2020 would allow sufficient time for a possible legislation for incorporating these properties into the National Disaster Management Fund (NDMF). The Privatization Commission told the CCoP that the 17 properties belonging to EERA had been picked up for privatization in pursuance of a federal cabinet decision of 7th March 2019 and subsequent identification by an Inter-Ministerial Committee constituted by the Prime Minister of 32 properties belonging to nine ministries, divisions and organizations which themselves had proposed these properties for sale and also forwarded relevant authority letters to the Privatization Commission for further processing.
The PC also submitted that it had already hired a financial adviser for the sale of the 32 properties and withdrawal of properties as being proposed by the EERA would adversely affect the whole privatization process besides sending negative signals to potential buyers and investors. The CCoP discussed the issue in detail and after input from members did not agree to the proposal from EERA for delisting of its properties and advised the Authority to complete all codal formalities still pending at its end to let the privatization process move ahead.
To another proposal by the Commerce Division for delisting from privatization of a 15-acre plot situated in an industrial area in Multan on the grounds that the same plot could be utilised more efficiently for some other purpose rather than being sold at a possibly low price, the CCoP decided that the privatization of the asset in question would go ahead as already decided by the government.
However, a committee headed by Adviser for Commerce, Textile, Industry and Production and Investment, Abdul Razak Dawood would closely scrutinize the reference price at the bidding stage to see if it matched the value of the plot and in view of it not being in tune with the worth of the property, the Commerce Ministry would come up with an elaborate alternative plan detailing various aspects of the opportunity cost to use the plot, lying idle since 2011, quickly and efficiently.