Pakistan to privatise Railways to meet IMF bailout clause

Islamabad: Pakistan has decided to sell at least 26 per cent shares of 31 state-owned entities, including Pakistan Railways and Pakistan International Airlines, in a massive privatisation move to fulfil a key clause of the IMF’s $6.7 billion bailout, reports said on Friday.

The Federal Government has directed the Privatisation Commission to immediately start the process of selling 31 public sector entities (PSEs) through initial and secondary public offering and transfer of 26 per cent shares along with management control, to the private sector, the Dawn reported.

The list was approved yesterday by the Cabinet Committee on Privatisation (CCOP), three days after expiry of September 30 deadline set by the International Monetary Fund to give a detailed plan to turn around the loss making firms and reducing government’s footprint.

The Privatisation Commission had tabled a list of 30 items, but the CCOP, headed by Finance Minister Ishaq Dar, added Lakhra Power Plant at the eleventh hour.

Lakhra’s privatisation would be subject to approval by the Council of Common Interest (CCI), as the plant was not among the 65 entities that were earlier approved for privatisation and restructuring, the report said.

Last month, the Supreme Court of Pakistan had struck down the Lakhra Power Plant’s 20 year lease to Associated Group after finding faults in the lease agreement.

Among the 31 entities approved are Pakistan Railways, Pakistan International Airlines (PIA), Pakistan State Oil, Islamabad Electricity Supply Company and Gujrawanala Electricity Supply Company.

The government had already announced the sell of 26 per cent stakes in the PIA to a strategic partner but the inclusion of the Pakistan Steel Mills was a surprising one, the report said.

The companies cleared for divestment include the Oil and Gas Development Company Limited, Pakistan Petroleum Limited, Mari Gas, Pak-Arab Refinery, Pakistan State Oil, Sui Southern Gas Company Limited, Sui Northern Gas Pipelines Limited, Pakistan International Airlines, PIA-Roosevelt Hotel in New York, Pakistan Railways, National Power Construction Company and Pakistan National Shipping Corporation among others, the Dawn reported.

The financial sector entities selected for sale in the first phase include National Bank of Pakistan, First Women Bank, Small and Medium Enterprises Bank, National Investment Trust Limited, National Insurance Company Limited, Pakistan Reinsurance Company Limited, State Life Insurance Corporation and House Building Finance Corporation.

The Civil Aviation Authority, Karachi Port Trust, Port Qasim Authority and National Highway Authority are also on the list, the report said.

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