A Senate panel on Tuesday hinted at referring the privatisation case of Heavy Electrical Complex (HEC) to the National Accountability Bureau (NAB), saying “wrongdoings” in the transaction that failed to materialise have shattered the trust of the parliament in Privatisation Commission (PC).
Details show that the HEC privatisation process was not completely transparent and the case should be referred to NAB for further investigations, said Senate Standing Committee on Finance and Privatisation Chairman Saleem Mandviwalla.
The parliamentary panel’s ‘no-confidence’ comes amid reports that some PC officials held late-night meetings with the HEC buyer at their residence. While responding to a question during a press conference held last week, PC Chairman Mohammad Zubair denied having any knowledge of such a meeting.
He acknowledged a few meetings that took place with his permission but he did not have any knowledge of a meeting taking place at PC official’s residence.
Mandviwalla has constituted yet another sub-committee to further probe the deal, after the previous sub-committee failed to complete the investigations. Senator Kamil Ali Agha of the PML-Q will head the new sub-committee.
“The parliament’s trust in Privatisation Commission has been shattered after the HEC was sold to a company that got registered after the HEC privatisation process began,” said Senator Mandviwalla.
He apprehended that the PC might repeat its mistakes in the future as well, which would discredit the privatisation process.
The financial advisor hired for the HEC transaction had valued the company in the range of Rs1.2 billion to Rs1.5 billion. But the PC Board approved to sell the entity at a throwaway price of just Rs250 million with a thin majority of 5 against 4. The Cabinet Committee on Privatisation subsequently endorsed the PC Board’s decision.
However, the transaction could not materialise after the bank bounced back the Rs225 million cheque of the buyer – Cargill Holdings Limited.
Cargill Holdings Limited was incorporated in Kenya just two days after the government announced to re-advertise the HEC privatisation.
The PC chairman could not give a satisfactory response when Senator Kamil Agha asked why the PC did not register a First Investigation Report (FIR) against Cargil Holdings’ owners after the bank did not accept the cheque.
Mandviwalla questioned the decision of accepting the cheque, which he said was unusual in case of a government deal.
Zubair said the FIR could not be registered as the buyer had approached the court against cancellation of the deal.
However, the high court has not issued any restraining orders, which may stop the PC from registering an FIR.
The standing committee was also briefed on the status of Pakistan Steel Mills (PSM). The CCoP has offered the entity to the Sindh government, but the PC chairman conceded that there had been no formal written request from the province to acquire PSM.
Zubair said that he had written a letter to Sindh’s chief minister, but he had not received a response. He said that in case the provincial government turned down the offer, the Commission will have to visit Russia and a Central Asian country to sell PSM.
“A Chinese company has shown interest in buying PSM but its concern is over-staffing. The number of employees should not be more than 6,000, while PSM’s existing workforce is 16,000,” said Zubair.
“The quality of the employees is also very poor, as 60% of 4,600 officers are matriculates or below in qualification,” he added.
The standing committee also questioned the timing of cutting gas supplies to PSM, bringing operations to a standstill.
The members feared that the government wanted to sell the PSM as scrap along with its precious land.
Published in The Express Tribune, October 21st, 2015.
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