The privatization programme Industries

process

Subsequent governments have attached high priority to the privatization in the 1990s but the present government recognised it as part of its economic policy for process and rewarding for potential investors. The programme for transfer of the ownership of restructuring and revitalization of the economy. Privatization in Pakistan is both attractive public assets is unambiguously predicated on the principle of reducing its direct participation in commercial activities. The minimization of government’s role in economic activity reinforces the need for regulation in strategic areas and the design of appropriate policies in order to ensure that the functioning of the economy is not distorted and those benefits are distributed in an equitable manner. lost. The reason for slow progress on privatization during the second half of the 1990s lay In its early phase, privatization was very abrupt and rapid but the momentum was in an inhospitable enabling environment, legal challenges to privatization, public opposition to privatization, and lack of adequate regulatory frameworks for the privatization of utilities. Recognizing this, government for the last three years focused and made strong progress on: Restoring and enhancing investor confidence by improving the macroeconomic climate and resolving investor disputes. Promulgating a Privatization Commission Ordinance to provide legal cover to tackle issues like investors confidence, transparency and distribution of proceeds. Restructuring and strengthening the Privatization Commission to make it a leaner, more transparent and more effective institution. Appointing the Chairman as Minister for Privatization to enhance the stature of privatization and facilitate the privatization process. Establishing or strengthening regulatory frameworks. Hiring top class financial advisors. Improving the public’s understanding of privatization rationale and process via seminars, interviews, publications, and a revamped website. A comprehensive privatization programme for the short and medium terms was prepared while keeping with the economic environment and investment conditions. Privatization Commission Ordinance, 2000 increases the accountability of the PC, and allocates 90 percent of privatization proceeds towards debt retirement and 10 percent towards poverty alleviation programs. Pursuant to said Ordinance, various sets of Rules & Regulations have been notified Pakistan Telecommunicat on Authority (PTA), National Electric Power Regulatory Authority (NEPRA), Nuural Gas Regulatory Authority (NGRA) and Oil & Gas Regulatory Authority (OGRA) has started functioning to build credible expertise within these sectors on urgent basis. The existing Privatization Programme is progressing satisfactorily. Till March, 2003, 128 privatization transactions had been completed aid proceeds of Rs. 97 billion were realized. This includes 22 transactions for Rs. 35 billion from October 1999 to March 20002. In addition, 15 industrial units were excluded from the Privatization Programme either for liquidation or being non-privatizable. The Cabinet Committee on Privatization (CCOP) and Board of the Privatization Commis. ion were re-constituted during the last two months. During November, 2002 to March, 2003, government’s remaining shares in POL, Attock Refinery Ltd. and DG Khan Cement have been divested through Stock Exchange which fetched Rs. 2.9 billion. Privatization is a complex and demanding reform and every stage requires utmost transparency and high level of managerial, financial and technical expertise. A number of major privatization transactions including PSO, OGCL, PTCL, Habib Bank, KESC, and Pak-Arab Fertilizer have been brought to a very advance stage. This implies on changing of focus from the privatization of the more straightforward industrial transactions to those involving the transfer of management control in services such as banking, transport and utilities. This requires sensitive decisions on pricing, restructuring and rightsizing. During the last three years the privatization efforts with the laying of ground work for the successful marketing of these major transactions faced formidable challenges due to some evert which delayed few privatization transactions. The recent performance of the stock market and the improvement of the fiscal and monetary position of the government auger well for the success of the privatization process. With several major privatization transactions on the cards, the outlook for 2003–2004 appears bright and positive.