WEB DESK: Privatisation Commission (PC) has reportedly included Telephone Industries of Pakistan in the list of entities approved for early sale after Defence Ministry’s refusal to take over the entity with all liabilities, well-informed sources told Business Recorder.
Privatisation Division recently informed the Cabinet Committee on Privatisation that Telephone Industries of Pakistan was a private limited company working under the administrative control of Ministry of Information Technology (MoIT). The Government of Pakistan was 100 per cent owner of Telephone Industries of Pakistan with 896,193 ordinary shares of Rs 1000 each.
According to sources, PC further stated that the current challenges being faced by the company included obsolescence of machinery, plants and skill base, intense competition in the telecom sector (especially vendor market), legacy public sector culture of entire workforce, and above all heavy burden of labour salaries (Rs 500.00 to 600.00 million annually).The Company has poor financial health with sales of only Rs 20.00 million in the financial year 2014-15.
It was further revealed that the CCoP, in its meeting held on October 03, 2013, approved the privatisation programme which included privatization of Telephone Industries of Pakistan.
However, Telephone Industries of Pakistan was not part of the list of entities approved for early privatization. Subsequently, considering the deteriorating condition of Telephone Industries of Pakistan, MoIT approached PC to initiate its privatisation at the earliest.
It was stated that the privatisation of Telephone Industries of Pakistan was discussed in a meeting chaired by the Finance Minister on August 23, 2015.
During the meeting, obtaining clearance from the Ministry of Defence was urged as Telephone Industries of Pakistan is located in an area surrounded by sensitive government buildings, before initiating its privatization. The Ministry of Defence gave its no-objection to the privatisation of Telephone Industries of Pakistan from security point of view.
However, the Ministry of Defence has shown its willingness to take over Telephone Industries of Pakistan subject to the following conditions: (i) pension liability of the employees to be met by the Government;(ii) payment of one year’s expenses relating to employees salaries etc for sustainability;(iii) Union be abolished; and (iv) all other liabilities towards government, banks customers, shareholders and employees be cleared by the government before taking over Telephone Industries of Pakistan with no obligation.
The sources said CCoP was apprised that the terms of the Ministry of Defence were not acceptable to the Ministry of Information Technology therefore the PC may initiate the privatisation of Telephone Industries of Pakistan.
The PC Board after thorough deliberations has recommended initiation of privatisation of Telephone Industries of Pakistan and requested the CCoP for inclusion of Telephone Industries of Pakistan in the list of entities approved for early implementation.
After a detailed discussion, the CCoP allowed inclusion of the Telephone Industries of Pakistan in the list of entities approved for early implementation, and approved the initiation of its privatisation. – Business Recorder