“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.”
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.
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.