PSM, PIAC accumulated lossess stood at Rs.176 bln, 316 bln: Senate Committee told

ISLAMABAD: Senate Standing Committee on Privatization here on Wednesday was informed that total borrowing and accumulate losses of Pakistan Still Mills (PSM) and Pakistan International Airlines Company limited (PIACL) was stood at Rs 176.6 billion and Rs. 316 billion respectively.

The committee met here with Senator Mohsin Aziz in the chair and discussed the working performance of the Ministry of Privatization and details of the privatization, which had been under taken during last four years.

Briefing the committee, Director General Privatization Commission, Mukhtar Waris apprised the meeting that annual losses of ailing public sector enterprises have been swelled to an unprecedented level and it was increasing the importance of the restructuing and private sector participation to ease pressure on the fiscal deficit.

He informed that the government had extended bailout package to PSM amounting Rs. 76 billion including employee’s salaries as of August 31,2017, howeve total debt and accumulated losses of PSM was stood at Rs. 99.4 billion and Rs. 176.6 billion as on June 30, 2017.

The committee was further informed that the government had also provided guarantees amounting to Rs. 161.5 billion to on behalf of PIACL, as on June 30, 2017, where as total borrowing and accumulated losses of the PIACL amount to Rs. 186.5 billion upto December, 31, 2016.

The Director General PC told the committee that 172 transaction were completed pre-2013 and total privatization raised Rs.648.6 billion.

It was informed that total five transaction were completed during last four years including privatization of United Bank Limited, Pakistan Petroleum Limited, Allied Bank limited , Habib Bank limited and National Power Construction Company.

The transaction completed during last four years raised gross proceeds of Rs. 172.87 billion including US$ 1.1 bilion in foreign exchange component.

The committee was informed that under current privatization program, the Cabinet Committee on Privatization had approved the privatization of 70 loss making public sector entities and the total 42 entities included in the early implementation of privatization.

The Small and Medium Enterprises Bank, Mari Petroleum and PSM was on the ongoing transaction, where as transaction structure of PSM has been finalized by the PC board and liability settlement plane in consultation with NBP, SSGC, PSM and Ministry of Industries and Production is being finalized.

Speaking on the occasion, Minister for Privatization Daniyal Aziz said that sick public sector enterprises were consuming over Rs 700 billion annually, adding that these loss making entities were operated by borrowing due to which private sector was deprived from the credit facility for industrial development and job creation opportunities.

The amount spent on these enterprises could be spent on the social sector development and poverty alleviation for rapid socio-economic uplift of the country.

Meanwhile, the Chairman of the Committee directed Ministry of Privatization to submit report on the discount rate provided during the privatization of UBL and HBL, besides preparing a proper policy of privatization in order to improve the working capacities of state own enterprises.

Discussing an other agenda item regarding reassessment of 1-2 percent census blocks, the Secretary Statistic told the committee that reassessment was not possible at yet, however the representative of the provincial governments were briefed about the scanning of farms, which were appreciated by them.