Equity transfer to PSO: Energy, Finance Ministers want sell off Plants
Ibn-e-Ameer
Ministers for Energy and Finance want privatization of two power plants-Guddu and Nandipur to clear the debt of Pakistan State Oil (PSO).
During a discussion in a recent meeting of the cabinet, the cabinet secretary suggested that in the case titled ‘Privatisation of Guddu Power Plant & Nandipur Power Plant, the option of equity transfer to PSO against its receivables may not constitute ‘privatization’,.
He said that it would be a transaction between government entities, and asked to recheck the legal position from the ‘Modes of Privatization’ given in the Privatization Commission Ordinance, 2000.
Members highlighted that government should conduct evaluation through a third party in such a case.
The Minister for Energy and Minister for Finance stressed that the privatization process should not be stalled and the receivables of PSO could be settled from the proceeds of privatizing the two power plants. The decision of CCOP to present the issue to CCOE should, however, be ratified.
The Cabinet Secretary also highlighted that large sums of monies were stuck in court cases regarding earlier privatization of SOES, including Schon Group. He suggested that the Prime Minister may make like to review the status of these cases and the quantum of monies involved.
The Prime Minister directed Privatisation Division to submit the list of defaulting companies, giving details of the cases and their present status.
Cabinet Committee on Privatization (CCoP) had directed power and finance divisions to examine a plan of equity transfer of Guddu and Nandipur Power Plants to Pakistan State Oil (PSO).
Cabinet body on privatization directed power and finance divisions to transfer equity to PSO while considering privatization of Guddu and Nandipur Power Plants.
PSO’s receivables had touched a record level of Rs 425 billion. The power sector was to pay Rs 184.8 billion to PSO on account of fuel supply.
Hubco and Kapco were also its defaulters that were to pay Rs 38.9 billion and Rs 5 billion respectively.
State-run companies Gencos were to pay Rs 140.7 billion. The government plans to transfer two power plants’ equity to PSO against receivables.
In the meanwhile, Cabinet committee on privatization directed the Petroleum Division to approach the Power Division and Finance Divisions, to examine the matter of equity swap to PSO against its receivables and present the issue before CCoE in the first place.
PSO to get stakes in Guddu, Nandipur plants
Privatization Division briefed the forum about the case as stated in the summary. It sought approval of the CCOP and requested to issue necessary directions to the Ministry of Energy for obtaining the decision of CCOE.
In the event of moving forward with privatization of GPP and NPP, it further asked to direct concerned Ministries to take necessary actions to resolve the problems hampering privatization of these power plants.
The Cabinet Committee on Privatization (CCOP) considered the summary submitted by the Privatization Division regarding “Privatization of Guddu Power Plant & Nandipur Power Plant”.
It directed the Privatization Division to continue the process of financial evaluation of Nadi Pur and Guddu Power Plants along with their assets. In the meanwhile, the Petroleum Division in consultation with the Power Division and Finance Division, shall examine the matter of equity transfer to PSO against its receivables and present the issue before CCoE in the first place.
