Government all set to sell LNG plants to Qatar
ISLAMABAD: To raise an estimated $1.5 billion and sell these public assets to Qatar directly in order to avert a potential sovereign default, the government all set to sell LNG plants to Qatar and it secretly delisted two power facilities that had been put on an active list for privatization over four years ago.
The change occurred two days after the government established a new cabinet committee with the goal of selling state assets quickly. This committee will now be given the 2460 MW LNG-fired power stations so that it can locate a suitable overseas buyer.
According to sources, the Privatization Commission Board (PCB) met on Thursday to discuss the removal of the plants from the privatization plan. Abid Hussain Bhayo, the minister for privatization and board chairman, presided over the meeting despite not being physically present in the city.
The PCB typically makes a news release following a board meeting, but this time no statement was made, ostensibly to maintain the privacy of the topic.
Requests for comments were not answered by the secretary of privatization or the minister of privatization. According to the sources, the board has advised the Cabinet Committee on Privatization to remove the power plants from the list of facilities eligible for privatization (CCOP).
The privatization list only contained these two significant assets. A Privatization Ministry or a Privatization Commission’s continued existence will be in doubt after their removal.
The 2022 law authorises the direct sale of assets to foreign nations, instead of following the long and cumbersome process set under the Privatisation Ordinance of 2000. The long process, however, ensures transparency while the direct sale arrangement may raise transparency concerns, as the decision will be taken mostly by the government, without following any competitive process.
There is one view that only 30% equity will be sold to Qatar and the price discovery will be based on known factors, reducing the element of discretion.
Due to the IMF program’s resurrection being delayed, Pakistan faces an immediate threat of sovereign default (IMF). The sale of the LNG-fired power stations has been identified by Finance Minister Ishaq Dar as one of the “low-hanging fruits” that would be sold to raise foreign cash. Dar has angrily refuted the claim that Pakistan will stop making payments on its debt.
After making two commercial loan debt payments totaling $1.02 billion on Friday, Pakistan’s gross official foreign exchange reserves fell below $4.5 billion. According to the central bank, the entire amount of debt repayments for the current fiscal year is $23 billion.
