Business Observer

The privatization of the Heavy Electrical Complex (HEC) has entered into its final stages.

Currently, different options for the determination of Reserve Price for the bidding of HEC shares are being considered by the Privatisation Commission (PC) before the bidding process is initiated with the approval of the Federal Cabinet.

Importantly, a breakthrough has been achieved in several of the pending matters related to Employees and settlement of liabilities due towards the financial institutions. PC is ensuring that no further liabilities are added to the balance sheet of HEC while the Ministry of Industries & Production is also playing a positive role to retain the credit rating of the entity.

HEC is a Government-owned entity under the administrative control of State Engineering Corporation, the shares of which are fully owned by the Ministry of Industries & Production/Federal Government. Located in Taxila, Heavy Electrical Complex (HEC) started its commercial operations in 1998.

The prime business of the HEC is to prepare high voltage electric transformers used by the power distribution entities along with services for testing, repairs, and onsite commissioning of transformers.

Also, Power Division is in agreement that no adverse action is taken against HEC by any DISCO. The settlement of long-standing dues of KPEZDMC is another milestone that has been successfully achieved with the cooperation of the concerned stakeholders.

The privatization of HEC has generated interest from a number of investors. The bidders have been prequalified by PC and the pre-bid meeting was also held in August 2021. Most of the issues raised by the pre-qualified bidders in the meeting were satisfactorily addressed.

It is expected that privatization of HEC will lead to the creation of positive sentiment for the overall privatization program presently underway. Multiple other privatization transactions of a larger ticket size and quantum are also queued up, which include the two RLNG based Power Plants, Pakistan Steel Mills, Guddu Power Plant, and Nandipur Power Plant. The bidding of HEC is likely to be held within this quarter after the approval of the Reserve Price of bidding by CCOP and Cabinet.

Privatization is a very thorough process wherein extensive due diligence and due care are involved in each phase. Starting from the financial, legal, and technical analysis of the entity being privatized to its marketing, inviting interests of potential bidders, outreaching to potential investors, and most importantly, clearing the encumbrances which could adversely impact the transaction.

Most of the entities offered for privatization by the Ministries are loss-making and have complex financial and legal issues, which take extensive efforts by Privatization Commission to bring to a level where the HEC transaction has eventually reached.

Source: Pro Pakistani

Privatization Commission on Monday informed the senate standing committee on privatization, that 23 properties in various cities have been sold in September through an open auction, and a sum of Rs 1.11 billion was generated for the national exchequer.

The meeting of the Senate Standing Committee on Privatization was held under the Chairmanship of Senator Shammim Afridi at the Parliament House on Monday.

The committee directed that the implementation status on the recommendations made by the committee in its last meeting on the capacity of the National Power Parks Management Company Limited (NPPMCL) plant should be re-evaluated and completed without further delay.

In this regard, the committee was apprised that Annual Capacity tests on both the power plants of NPPMCL are being conducted every year regularly and witnessed by Central Power Purchasing Agency (Guarantee) Limited (CPPA-G) as per provisions of the Power Purchase Agreement (PPAs). Accordingly, the annual Capacity Tests of both the power plants were conducted on completion of 3rd anniversaries of Commercial Operation Dates (CODs) and current capacities of NPPMCL’s power plants for 4th Agreement Year are better than the agreed capacities under the PPAs,i.e., Net Capacity of Haveli Bahadur Shah Power Plant: 1176.042 MW, net capacity of Balloki Power Plant: 1164.608 MW.

Briefing by the Ministry of Privatization on “Sale of properties owned/ controlled by the Federal Government” under the ongoing Privatization Programme was also taken up. Auctions were held from 7 to 28 September 2021 in different cities of the country under the supervision of the auction committee. Twenty–three (23) properties having a reserve price of PKR 1.01 billion were successfully auctioned for Rs. 1.11 billion. Whereas, three (3) properties, having a reserve price of PKR 5.4 billion were unable to attract any bidder. The Inter-Ministerial Committee (IMC), PC Board, and Cabinet Committee on Privatisation (CCoP), and Federal Cabinet approved the auctions and bid prices.

Advertisement for the hiring of a financial adviser for the sale of tentative seventeen (17) properties have been placed in media, the committee was briefed. The Chairman Committee gave directions to share with the Senate Committee copies of the approved correspondence with the Cabinet.

The committee was informed that the unsold properties worth Rs 5.65 billion include 120 Kanal Land Adjacent Estate, Phase 1, Multan, under Trading Corporation of Pakistan (TCP), 48 Kanal 18 Marla land adjacent to Link Airport Road, Rahim Yar Khan, under CAA, Aviation Division, and 41.628 Kanal land and properties adjacent to 87 Shahrahe-Quaid-e-Azan, Lahore, under Republic Motors (Private) Limited, Ministry of Industries & Production, and the unauctioned properties also included Ministry of Water Resource’s 2 Kanal Land, near Saidu Sharif Road, Swat, KPK. The auction is postponed on KP Govt. request.

Briefing by the Ministry of Privatizations on, “SME BANK Limited’ under the ongoing Privatizations Programme was also taken. The committee was informed that despite all efforts and iterative interactions with the pre-qualified bidders to date, positive feedback from the pre-qualified bidder is not for the coming. Alternatively, SME Bank is being proposed to be delisted so as Finance Division and SBP may proceed with alternate plans to either re-capitalize or liquidate the bank given piling up colossal losses resulting in negative equity in excess of Rs. 3 .5 Billion. The Chairman Committee acknowledged the current status of delisting and asked to keep the committee informed on the process of delisting.

The meeting was also briefed by the Ministry of Privatization on the current status of Privatization of Services International Hotel, Lahore. The Chairman Committee inquired about the continuous variation in height status, to which the committee was informed that height clearance from CAA was approved as 350 ft, which was further reduced to 310 ft by PAF.

The approved height was one of the key parameters used to determine reserve price by the Financial Advisor. Nonetheless, a reference was received from the CAA, indicating a further reduction in height in the light of the latest approval of the federal Cabinet. According to the revised approval, a maximum of 245 ft height has been communicated by CAA vide their letter dated 24 May 2021, which has a material impact on the valuation of the property.

The committee was informed that on 27 October 2021, the Cabinet took note of the presentation by the Secretary, Aviation Division, on “Height Restrictions under Rule 68 (Obstacle Limitation Surface) of CAA Rules” and Aviation Policy and its implementation status, highlighting any deviations (if any) and the reason thereof. Further, the Cabinet ratified the decision of the CCoP in the case, titled “Privatization of services international Hotel Lahore-Approval of Bidder and Bid Price,” taken in its meeting, the committee was informed that upon ratification/approval of SIH bidding process by the Federal Cabinet, the Privatization Commission on November 02, 2021, has issued a Letter of Acceptance (LoA) to the successful bidder for completion of remaining formalities.

The meeting was attended by Senator Syed Muhammad Sabir Shah, Muhammad Qasim, Anwar Lal Dean, Anwar Lal Dean, Molvi Faiz Muhammad, and Senator Aon Abbas. Senior Officials from the Ministry of Privatization Commission and IT/RE, PC was also in attendance.

Source: Pro Pakistani

Ambassador of Palestine to Pakistan, Ahmed Rabei, has reaffirmed his country’s resolve to strengthen the bilateral relations with Pakistan through enhanced cooperation in various areas to benefit the citizens of both countries.

In an exclusive interview with the Associated Press of Pakistan (APP), the diplomat revealed that the Palestinian government was already working with Pakistan. “We are working on an extensive plan to enhance trade, tourism, cultural and educational exchanges for optimum bilateral relationships between brotherly countries,” the Ambassador stated. He added that an independent economic desk was set up at Pakistan’s Ministry of Foreign Affairs to spearhead all related developments.

The ambassador said the Palestinian administration had partnered with the Pakistani government on the level of traders and chambers of commerce.

Thanking Pakistan’s leadership for regularly supporting the Palestinian cause, he expressed gratitude to President Dr. Arif Alvi, Prime Minister Imran Khan, and Foreign Minister Shah Mahmood Qureshi for adopting an “unprecedented” stance in favor of Palestine.

He acknowledged Prime Minister Imran Khan’s iconic speech at the United Nations General Assembly and termed it “highly commendable”.

Source: Pro Pakistani

A delegation led by the Australian Trade Commissioner to Pakistan, John Cavanaghon, called on the federal Minister of National Food Security and Research, Syed Fakhar Imam, at his office in Islamabad today (15 November).

Minister Imam welcomed the Australian Trade Commissioner and said that Pakistan and Australia should enhance their relationship in agro-economy, especially by enhancing bi-lateral trade and the transfer of agro-technology.

He said that Pakistan’s exports to Australia have shown little increase in recent years, and that the quantum of exports can be huge with a little more focus on the area. He remarked that the trade between the two countries can achieve new heights if Pakistan improves its export of fruits, vegetables and rice to Australia.

The minister said that Pakistan has limited exports to Australia in terms of mangoes and citrus fruits due to the strict regulations of the National Plant Protection Organization of Australia. He and Commissioner Cavanaghon agreed to review and work towards easing the regulations.

Minister Imam also stressed the need to import agro-technology and upgrade human resources in Pakistan’s agriculture sector, and both sides agreed to work together to eradicate the citrus canker disease to increase Pakistan’s export of citrus fruits to Australia.

Minister Imam also highlighted that the export of mangoes to Australia has increased from two tonnes in 2013 to 75 tonnes in 2021, and that more attention to it can increase it manifold.

He added that the export of citrus fruit has increased from 350,000 tonnes to approximately 460,000 tonnes in just one year, and the export of mangoes has increased from 110,000 tonnes to 142,000 tonnes in the last year. He also mentioned that Pakistan has huge export potential for produce such as mangoes, citrus fruits, apples, and cherries, etc.

The minister added that Prime Minister Imran Khan has prioritized the development of high tech, construction, and the agriculture sector. He also suggested that the technological exchange between Australia and Pakistan can enhance the latter’s agricultural sector.

Commissioner Cavanaghon said that the upgradation of technology and human resource is the key to revolutionizing the agriculture sector, and that Australia will provide Pakistan technical agricultural trainings to uplift its quality of human resources.

He said that the transfer of agro-technology through the coordination of both the countries’ private sectors can boost Pakistan’s agro-economy.

The commisioner also agreed to enhance agricultural research through the transfer of quality human resources to the research institutes of the country.

The meeting was also attended by the senior officials of the ministry.

Source: Pro Pakistani

The Pakistani Rupee (PKR) finally recovered against the US Dollar (USD) and appreciated 43 paisas against the latter in the inter-bank market today. It hit an intra-day high of Rs. 174.20 against the USD during today’s open market session.

The PKR appreciated by 0.25 percent against the USD and closed at Rs. 175.29 today after it posted losses of Rs. 1.54 and closed at Rs. 175.73 in the inter-bank market on Friday, 12 November.

Today’s gains come on the back of news that Pakistan received remittance inflows that surged to above $10 billion between July and October 2021. Inflows during the first four months of FY22 have mainly been sourced from Saudi Arabia ($2.7 billion), UAE ($2.0 billion), the UK ($1.5 billion), and the USA ($1.1 billion).

Although the local currency has reported gains in today’s market, the speculation in the forex market is the biggest reason behind its harrowing freefall, claimed the Advisor of Finance, Shaukat Tarin. While discussing the Rupee forecast with reporters, he explained that it has devalued by more than Rs. 10 due to speculative trading, and that its real value should be between Rs. 165-167 against the dollar.

Regarding the PKR’s interbank performance earlier today during the trading hours, the former Treasury Head of Chase Manhattan Bank, Asad Rizvi, said, “On Friday to show solidarity with PAK CRICKET TEAM #PKR traded @ 176 all-time high. While Remittances has hit $ 2.5b. Rupee could hold its breath”.

He added, “I/B Market will Focus will be on Hike of CRR to 6%. Roughly. Rs 175 billion is expected to be drained out of the system”.

The PKR maintained its blanket performance against most of the other major currencies as well and posted blanket gains in the inter-bank currency market today.

It gained 48 paisas against the Euro (EUR), six paisas against the Malaysian Ringgit (MYR), and one paisa against the Chinese Yuan (CNY).

It also posted gains of 11 paisas against both the UAE Dirham (AED) and Saudi Riyal (SAR) in today’s inter-bank currency market.

Besides this, the PKR posted blanket losses of nine paisas against the Canadian Dollar (CAD), two paisas against the Pound Sterling (GBP), and 57 paisas against the Australian Dollar (AUD).

Source: Pro Pakistani

Pakistan imported mobile phones worth $644.673 million during the first four months (July-October) of 2021 compared to $557.961 million during the same period of last year, registering a growth of 15.54 percent, according to the Pakistan Bureau of Statistics (PBS) data.

The overall telecom imports into the country during the period under review (July-October) 2021 increased by 22.40 percent by going up from $691.644 million in July-October 2020 to $846.553 million in July-October 2021.

On a month-on-month basis, the imports of mobile phones into Pakistan decreased by 28.37 percent during October 2021 and remained $149.713 million when compared to $209.013 million imported in September 2021, the PBS data revealed. On a year-on-year basis, mobile phones witnessed an increase of 130.08 percent when compared to $65.069 million in October 2020.

The overall telecom imports decreased by 22.95 percent MoM during October 2021 and remained $208.678 million, when compared to the imports of $270.823 million in September 2021. The overall telecom imports witnessed 105.82 percent growth when compared to $101.390 million in October 2020 YoY.

Other devices imports during July-October 2021 increased by 51.01 percent and remained $201.880 million compared to $133.683 million in July-October 2020. Other apparatus imports registered 4.60 percent negative growth on a month-on-month basis and remained $58.965 million in October 2021 compared to $61.810 million in September 2021 and registered 62.34 percent growth when compared to $36.321 million in October 2020.

The production of mobile phones by local manufacturing plants has surpassed the number of commercial mobile phones imports in the country during Jan-September 2021 as the local production was recorded at 16.15 million compared to the imported mobile phones of 9.02 million.

Source: Pro Pakistani