Pakistan eyes major asset sales by June

Bloomberg
Published: February 07, 2008, 00:15

Karachi: Pakistan plans to sell shares of Kot Addu Power Co., National Bank of Pakistan and Habib Bank Ltd. by June, reviving a programme to divest assets that stalled after President Pervez Musharraf imposed emergency rule.

The share sales will be aimed at overseas investors, Finance Minister Salman Shah said. National Bank is the country's biggest by assets, rival Habib Bank has the most branches, and Kot Addu Power is the nation's largest power producer.

The companies "are already doing due diligence and preparing the ground work", Shah, who is in charge of the asset sale, said yesterday, adding that "for National Bank, we have done most of the homework".

The sales, targeting overseas investors, will test confidence after three months of violence and instability that claimed the life of former Prime Minister Benazir Bhutto and stalled elections for six weeks.

The turmoil delayed share sales that the government needs to help repay $38 billion of overseas debt. The country has raised about $7 billion selling state assets since the programme began 18 years ago.

The government aims to get as much as $3.5 billion in the fiscal year ending June 30 from the sale of state-owned assets, it said in November. It has so far raised $440.6 million, and investors said the three planned asset sales may not fare well.

"Completing this transaction and getting decent pricing in this fiscal year ending on June 30 seems difficult," said Nasim Begof Arif Habib Investments.

"It would be better timing to wait for the first or second quarter of the year starting July, when the overall picture will be clearer."

I wonder what has been sold by the various governments. There must be a list somewhere? I hope all these companies are doing better then when under state control.

They normally do better due to less corruption and mismanagement. I'm waiting for them to sell PIA, which is a drain on the government, but would be easily profitable if sold (because the extra and useless management would be fired, so the mismanagement would end).

Totally agree with you bro, airlines like shaheen are doing better and making there fleets bigger and making money and on the other side an airline like pia is just going down the drain.


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Yea, that is because PIA has over 10,000 extra workers and those extra workers are mainly in the management, which leads to further mismanagement and further money loss; so PIA has to pay 10,000 extra workers (for no reason) and then it has losses in mismanagement. The PIA is a drain on the government, so selling it would lift a burden on the government AND at the same time the government would be making money off the sale (however much they sell it for). I would suggest selling it to Shaheen or AirBlue (or split it and sell it to both) on a profit payment basis. That would mean that when the company (that buys PIA) starts making a profit then they start paying for PIA (profit would not be that hard to make once you get rid of the 10,000 extra workers, or expand the airline and make use of those 10,000 extra workers and end mismanagement). The government would immediately see a benefit because they would not have to pay for PIA's annual losses, and then they would get money from the sale (as time goes on); the companies would gain because they would be on a profit payment basis and they would be enormously expanded.

then some one will come around and start claiming that it was sold at an unfair price and the people of pakistan were looted and forget the fact that to even $1.00 for a company thats been in loss for 2 decades ... is well .. a bonus

And then the government should have some balls and ignore it. If the government starts acting upon the opinions of some people they would never get anything done (thats actually half of our problem, example is the numerous dams that should be built already). If you set me in charge of PIA (give me full authority), I could get it into positive numbers within a few years (easily).

thats what my uncle said after being hired as a senior manager. PIA tried to bring in external managers (who also had to be engineers).

You know what happened? PIA's own engineers/technical staff went on strike for refusal to work under/with "new managers". thats offcourse PIA talk for refusal to change their ways. So they had everyone fired.

PIA let him and 8 other senior managers, who were all recent hires GO! . He was with PIA for less than 4 months. its impossible to survive such burocratic culture. We are best of selling it to some private invester.

That's why I would need/want full authority. If they went on strike, I would fire them and go ahead and hire other people, even foreigners if it came to it (from any country, and trust me, there are tons of places where you could get workers), because if they want to be little b!tches, I'll treat them as such. Fixing the bureaucratic culture is in my blood man, you should have seen what my dad did in Karak when he was assistant commissioner there over a decade ago.

Its not in the interest of any political parties to sell its heavy weight loss making industries. Why? Because when they get elected, they could give jobs to thousand of their goons in these entities. Not to mention the gross mismanagement and bearaucratic hurdles. Best is to sell it off.

I agree, I'm shocked at the way some people make money in PAkistan. a Relative of mine in Pakistan Railway told me about a con (a few years ago)which worked like this, worker would clock on and then go to his real job. supervisor would cover for him if any questions were asked, at teh end of the day the super visor and worker split the wage between them, even though he was never there. The only way to deal with this stuff which is rife in

Some workers care mroe about the unions than their own boss.

Pakistan needs aggressive privatisation. It should have happened 20 years ago. The only assets not worth selling are ones that actually make profit. Sell everything else.

And then the government should have some balls and ignore it. If the government starts acting upon the opinions of some people they would never get anything done (thats actually half of our problem, example is the numerous dams that should be built already). If you set me in charge of PIA (give me full authority), I could get it into positive numbers within a few years (easily).

PIA is full of seasoned bureaucracy .. I don't see any way of changing it .. Seen many new faces which could not cope up the pressure including some very heavy weights.

If you bully them they are going to move the courts against you .. heck what even your secretary will not support you.

PIA ka to Allah hi hafiz hay !

When it comes to selling. The truth is people who are friendly to the government get to choose first. Not necessary a Pakistani political problem. All governments do it inc present one. There are examples of favouratism in UK and US.

Old scam that is global. Reading it is a big problem in India when the goverment implements a programme to help the poor. They just count more workers then they have to get extra funding. Then pocket the rest. Less likely to happen in private sector. However Public-private partnership are effective. If private company misuses govt money you can black list them thus damaging their reputation. Also fining them helps. Having a bad reputation is business suicide thats usually acts as a deterent to fraud.