ISLAMABAD: The government is going to start the marketing process next month to sell a 49 per cent stake in Pakistan International Airlines and plans to list shares in several power utility firms this year, privatisation minister Mohammad Zubair has said.
“We are going to start the soft marketing in June,” Zubair told Reuters, in an interview on the sidelines of an investment conference organised by Renaissance Capital. “We have to understand the market, and what the market is looking for,” he added.
“We are looking for another investor, it could be an airline but doesn’t have to be, but we are just looking for one.” Prime Minister Nawaz Sharif had made the privatisation of Pakistan International Airlines (PIA) a top goal when he came to power in 2013.
Parliament adopted a law in April to convert PIA into a limited company but it prevented the government from giving up management control. Zubair said this clause would apply only for a two-year period, after which the government could sell the whole stake.
The privatisation of 68 state-owned companies, including loss-making enterprises such as PIA, Pakistan Steel Mills and power distribution companies, is a major element of a $6.7 billion International Monetary Fund package that helped Pakistan stave off a default in 2013.
Fierce resistance to privatisation by opposition parties and labour unions has made the programme politically sensitive.
The power firm privatisations had appeared to have stalled, but Zubair said they would go ahead this year. The government plans to list shares in 10-20 per cent of each firm on the domestic stock exchange, making the firms more transparent and accountable.
He said shares in the Faisalabad Electricity Supply Company Ltd would be floated in November, followed by the sale of shares in the Lahore and Islamabad power utility firms.
On the stalled privatisation process of Pakistan Steel Mills, Zubair said he hoped the government would agree to restart the marketing process in earnest in the next few weeks.
“We are asking if they need anything else to take that decision, we want to make sure they have nothing to complain about when the cabinet committee meets after June 10 and takes the decision to restart the marketing,” he said.
“It will happen eventually. Of course it presents a huge challenge,” he said, adding he had kept in touch with Chinese companies which had expressed interest.
He added that the sale of SME Bank Ltd was expected to be completed by year-end, and that of Telephone Industries of Pakistan by March 2017. He did not say how much the government expected to raise from these transactions.
With elections due in 2018, Zubair said he hoped the benefits of completed deals would soon become apparent and soothe opposition to future privatisations. “It would be far, far easier if there would be no political opposition,” he said.
“Because of the political implications, because of the employees’ resistance, it is not that simple for any government to push through, and as we come near 2018 it will become more and more difficult.”
