28 January 2004 Wednesday
05 Zilhaj 1424
By Sabihuddin Ghausi
KARACHI, Jan 27: A committee of cabinet ministers is working out a strategy for the privatization of Pakistan Telecommunication Company Limited (PTCL) and will finalize its recommendations before June this year.
The committee comprising ministers and senior officials have been asked to recommend the best possible strategy for the privatization of PTCL. Well-placed sources say the committee is confronted with a pressing issue, that is, if PTCL is offered to a single group of strategic investor it will create a giant monopoly.
There will be many monopolies if the giant corporation is divided into city and town exchange basis, and that too, will create many problems for the regulator.
The PTCL privatization to one or many strategic investors is the burning issue in the ruling establishment where opinion seems to be sharply divided. There is also a question whether PTCL should be privatized at all or not.
The establishment also appears to be divided on the issue of privatization of Pakistan State Oil (PSO). A powerful section of the ruling elite prefers to retain state control over what is being described as the strategic assets.
"What are the strategic assets?" is a question that no one has answer and its ambiguity has helped the establishment put a spanner in the disinvestment process of quite a few state entities.
The only forum from where the government can get a clear verdict on the privatization and a precise definition of strategic assets is the parliament. But for last over a year, the National Assembly and the Senate have echoed with political slogans and no serious business has been taken up by the graduate legislators.
The Senate did discuss the privatization of Habib Bank early this month. But the discussion lacked depth and direction, and it was more of a match of hurling accusations and counter accusations rather than any serious debate.
The sources now expect that the HBL transaction would be finalized by the middle of the next month when its management would be transferred to Aga Khan Fund. "Transfer of HBL to Aga Khan Fund will be a big message to foreign investors," the sources quote a minister as saying. With HBL passing onto Aga Khan, 80 per cent of Pakistan's banking will go to the private sector and an investor (Aga Khan) of international repute will be incharge of one of the giant banks.
"Has the taking over of United Bank by a Middle Eastern investor made any difference?" is the argument given by a government functionary in defence of HBL being handed over to Aga Khan.
"Foreign investors bring confidence, foreign resources and management skills and carry Pakistan's goods and services to foreign markets rather than taking assets from Pakistan" is another forceful argument being offered by those who want to offer national assets to the foreign investors.
Privatization Minister Dr Hafeez Sheikh has already described the year 2003 a good year during which OGDCL shares were successfully offered to public subscription in the stock exchange.
During the current year, the Privatization Commission is set to offer 10 per cent shares of Sui Southern Gas Company, Sui Northern Gas Company, Karachi Electric Supply Corporation, Faisalabad Electric Supply Company, Kot Addu, Faletti's Hotel, shares of UBL, National Investment Trust and a few other entities.