ISLAMABAD: No progress has been made on the privatisation of the SME Bank because of lukewarm response to the Privatisation Commission from the pre-qualified bidders so far.
In this regard, a meeting of the Senate Standing Committee on Privatisation was held under the chairmanship of Senator Shamim Afridi at the Parliament House on Monday.
The Ministry of Privatisation briefed the meeting about the SME Bank Limited under the ongoing privatisation programme. The committee was informed that despite all efforts and interactions with the pre-qualified bidders no positive feedback was received.
Alternatively, the SME Bank is being proposed to be delisted so as the Finance Division and the State Bank of Pakistan (SBP) may proceed to alternative plans to either recapitalise or liquidate the bank given piling up colossal losses, resulting in negative equity in excess of Rs3.5 billion.
The committee chairman acknowledged the present status of delisting and asked to keep the committee informed on the delisting process.
Implementation status on the recommendations made by the committee in its last meeting on the capacity of the National Power Parks Management Company Private Limited plant should be reevaluated and completed without further delay.
In this regard, the committee was apprised that the annual capacity tests on both the power plants of NPPMCL are being conducted every year and was being witnessed by the Central Power Purchasing Agency (Guarantee) Limited as per the provisions of the Power Purchase Agreement.
Accordingly, the annual capacity tests of both the power plants were conducted on completion of the third anniversary of commercial operation dates.
The existing capacities of NPPMCL’s power plants for the fourth agreement year are better than the agreed capacities under the PPAs, i.e., net capacity of Haveli Bahadur Shah Power Plant: 1,176.042MW; and net capacity of Balloki Power Plant, 1,164.608MW.
The Ministry of Privatisation also briefed on the sale of properties owned/controlled by the federal government under the ongoing privatisation programme. In this regard, several auctions were held from September 7 to 28, 2021 in different cities of the country under the supervision of the auction committee.
Twenty-three properties having a reserve price of Rs1.01 billion were successfully auctioned for Rs1.11 billion, whereas three properties having a reserve price of Rs5.4 billion were unable to attract any bidder.
The IMC on October 14, 2020, PC Board on October 21, 2020, CCoP on November 16, 2020 and the Federal Cabinet on December 1, 2020 approved the auctions and bid prices.
The advertisement for hiring of the financial adviser for the sale of tentative 17 properties was published on July 2, 2021. An Evaluation Committee duly constituted under the Privatisation Commission laws, evaluated proposals and forwarded the recommendations for hiring of top ranked IP for consideration of PC Board for the meeting.
The committee chairman directed to share with the Senate Committee the copies of the approved correspondence with the Cabinet.
The committee was also informed about the unsold properties.
The Privatisation Ministry also briefed the meeting about the current status of the privatisation of services International Hotel, Lahore.
Upon inquiry by the committee chairman, the meeting was informed that the height clearance from the Civil Aviation Authority (CAA) was approved as 350-feet, which was further recued to 310-feet by the PAF.
The approved height was one of the key parameters used to conduct the highest and best use study to determine reserve price by the financial adviser.
Nonetheless, a reference was received from the CAA, indicating further reduction in the height in the light of the latest approval of the Federal Cabinet.
According to the revised approval, a maximum of 245-feet height has been communicated by the CAA vide their letter dated May 24, 2021, which has material impact on the valuation of the property.
The committee was informed that on October 27, 2021, the Cabinet took note of the presentation by the Aviation Division secretary regarding the height restrictions under Rule 68 (Obstacle Limitation Surface) of the CAA Rules, as well as the Aviation Policy and its implementation status, highlighting any deviations (if any) and the reason thereof.
The Cabinet ratified the decision of the CCoP regarding the privatisation of the Services International Hotel Lahore’s approval of bidder and bid price, taken in its meeting held on September 10, 2021.
The committee was informed that upon ratification/approval of SIH bidding process by the Federal Cabinet, the Privatisation Commission on November 2, 2021 has issued the letter of acceptance to the successful bidder for completion of the remaining formalities.
Senator Syed Muhammad Sabir Shah, Muhammad Qasim, Anwar Lal Dean, Molvi Faiz Muhammad and Senator Aon Abbas, senior officials from the Ministry of Privatisation and IT/RE, PC, were present on the occasion.
