The Pakistani government is willing to sell its two Liquid Natural Gas (LNG) power stations for $1.5 billion. Four years ago, the government placed the LNG power plant on an active privatisation list to raise $1.5 billion. The intention is to remove the plant from the public domain.
In order to prevent a sovereign default, these assets were sold to Qatar. In addition, the decision was made two days after the government established a new cabinet committee to hastily sell state assets. The committee would be able to sell the 2,460 megawatt (MW) LNG-fired power units to an international buyer.
Thursday’s meeting was scheduled by the Privatisation Commission Board (PCB) after the formation of a committee, according to multiple sources. The goal was to eliminate the factories from the Privatization programme.
In addition, Abid Hussain, the Minister for Privatization and Chairman of the Board, was unable to physically attend the meeting but participated electronically.
Without a doubt, the PCB issues press releases following board meetings. Although there was no declaration this time, it appears that the intention was to keep the situation quiet.
However, neither the Privatization Minister nor the Privatization Secretary responded to a request for comment.
According to the sources, the board has recommended that power plants be withdrawn from the Privatization list and forwarded to the Cabinet Committee on Privatization.
Indeed, these two assets and resources were the most valuable on the list for privatisation. The development casts question on the existence of a Privatization Minister or Privatization Commission.
However, the previous PTI administration placed both power stations on an active privatisation list. Despite this, the goal was to earn roughly $1.5 billion for budget funding.
It has been unable to settle the concerns or raise Rs 103 billion in additional debt over the past four years. The government aims to retire its equity in this manner.
During the PMLN administration, the government provided funding for both of the plants. National Power Park Management Company Private Limited (NPPMCPL) is currently in charge of both projects, as opposed to the 70:30 debt-to-equity ratio in NEPRA’s tariff for NPPMCPL’s power facilities.
According to reports, the board was well aware of the PM’s office’s desire to remove the plants off the Intergovernmental Commercial Transaction Act of 2020 list.
As opposed to the lengthy and cumbersome process established by the 2000 Privatization Ordinance, the 2022 law authorises direct sales of assets to foreign nations.
However, the protracted procedure guarantees openness. Direct sale arrangements may raise problems regarding transparency. Consequently, the government will make the ultimate determination without competition.
It is also believed that Qatar will only sell 30 percent of its equity. The discovery of prices is contingent on recognised criteria that restrict discretion.