By: Zaheer Abbasi
Finance Ministry has claimed that there was no pressure on the government for privatisation of Pakistan International Airlines or any other agenda and privatisation of State-Owned Enterprises (SOEs) was its (government) own agenda that has been given to the IMF.
“There was no pressure from the IMF for privatisation of Pakistan International Airlines (PIA),” said secretary finance Dr Waqar Masood while speaking before the Senate Standing Committee chaired by Saleem Mnadviwala on Thursday.
The committee was displeased both with Ministry of Water and Power and Ministry of Finance for their failure to provide the required details as to what was the urgency to prepare, get approve, and issue instructions for the payment of Rs 326 billion circular debt to Independent Power Producers (IPPs) in a single day.
Ministry of Water and Power and Ministry of Finance failed to satisfy the Senate Standing Committee on Finance for completing the entire transaction from preparation of proposal to approval and issuing instruction to State Bank of Pakistan (SBP) for releasing Rs 326 billion to the IPPs in a day.
A member of the committee stated that the question is whether the law of land was followed in making payment to the IPPs. The committee was informed that an undertaking from the IPPs for withdrawal of litigation from the court was taken before making the payment of Rs 326 billion.
While briefing the committee on the IMF agreement, Secretary Finance acknowledged the borrowing of a relatively expensive loan from the International Monetary Fund (IMF) under $6.64 billion Extended Fund Facility (EFF) for repayment of Stand-By Arrangement (SBA) loan.
“Interest rate of the SBA was 1.03 percent compared to 1.05 percent of the EFF facility. However, that repayment of EFF was relatively longer than the SBA,” he said, adding that “for the first time during any political government an IMF programme would be completed successfully.”
Mandviwala congratulated secretary finance for taking a loan and for almost successful completion of the programme.
The Finance Secretary said “country’s total debt is over Rs19 trillion with foreign debt component of around 28 percent of the total debt”.
Ministry of Water and Power claimed that the recoveries of power sector have improved from 86.4 per cent to 93.4 per cent and line losses have reduced from 18.6 per cent to 16.7 per cent. Joint Secretary Zargham Eshaq Khan maintained that the management of circular debt was possible because of improvement in recoveries and reduction in line losses.
The committee sought all the details of the settlement of Rs 326 billion circular debt with timing of transactions from preparation of the proposal to the release of payment to the IPPs.
The committee refused to approve a government proposed law for perks and privileges to the members of Elections Commission of Pakistan despite Secretary Finance’s insistence.
Minister of State for Parliamentary Affairs Sheikh Aftab Ahmed moved the Senate Standing Committee on Finance for consideration a bill for allowing salary, allowances and perks and privileges to the members of ECP but members of the committee opposed the law, arguing that “they were already taking such benefits”.
Waqar Masood argued that the committee does not have the power to reject the proposed law because this was money bill but the members of the committee disagreed to him and contended that the proposed law does not come under money bill and decided to seek the opinion of Speaker National Assembly on the matter.
Secretary Privatisation Ahmed Nawaz Sukhera stated that after the conversion of PIA from corporation to a company, the financial advisors would have to prepare new transaction structure under the new legal framework. He said that the new law provides full protection to the employees of PIA.
Source: Business Recorder