A. PRIVATIZATION ACHIEVEMENTS 1993-96

The Peoples Government introduced for the first time in the history of Pakistan the concept of privatisation in its 1988 Manifesto. In 1989, it legislated a framework for privatisation, hired consultants and undertook the first privatisation by selling shares to PIA. However in 1993 the Peoples Government inherited a Privatization Commission with inadequate technical and institutional capacity for implementation of Privatization Agenda. There was lack of transparency and perception of nepotism in the sale of industrial units. There were charges of favouritism in the sale of Muslim Commercial Bank and cement plants. The Privatization Commission lacked credibility in the investor community and in the international market.

The privatization program of the Peoples Government was acclaimed by the World Bank as one of the most organised and professional in the Asia Pacific region. The Privatization Commission received funds from the World Bank for technical assistance and upgrading of its professional capability in the privatization process. The Privatization Commission was re-structured and qualified technical consultants were hired to improve the quality of work.

The Government took steps to protect those immediately affected by the privatization process, namely:

1) Employees
2) Consumers

The Peoples Government has always considered the workers as the back bone of the economy. Employees were allowed to match the highest bid in sales of industrial units. AC Wah one of the most modern cement plants in Pakistan was given to the employees on that basis. The Peoples Government believes that the employees must participate in this nation building program. There were numerous complaints by the labour on non-payment of golden hand shake and VSS by the PML-N Government. In order to ensure that the workers were protected, the Privatization Commission amended sale contracts so that the benefit to the workers were guaranteed.

The employees of WAPDA had been vehemently opposing privatization. It was one of the major success of the Peoples Government that they agreed to the Government's privatisation program for power plants and distribution networks. A comprehensive package of incentives and protection for WAPDA employees was agreed. This provided comfort to foreign investors and sent a message to the world investment community that privatization policy of the Peoples Government has the support of the workers of Pakistan.

The Peoples Government also established the regulatory framework to protect consumers. The regulatory framework enables the Government to check monopolist practices as well as to monitor prices. The laws provide adequate protection to consumers and a clear framework for operations to the private sector.

• For the Telecommunication sector, the Pakistan Telecommunication Authority.

• For the power sector the National Electricity Power Regulating Authority.

• For the gas sector the Gas Regulatory Authority.

NOTABLE PRIVATIZATIONS 1993-96

PTC

• In 1994, the Government offered 11.6% in Pakistan Telecommunication Corporation (PTC).

• In the first phase PTC Vouchers were offered in small tranches for the benefit of small investors in Pakistan. The Government offered one million PTC Vouchers worth Rs. 3 billion which represented 2% of proposed share of PTCL, the price of PTC Voucher was fixed at Rs. 30 per share carrying a premium of Rs. 20 per share over the par value of Rs. 10. The public floatation was heavily over subscribed to the tune of Rs. 19.17 billion. This was the biggest and most successful public issue in the history of the stock market in Pakistan.

• The Government floated an additional 5 million PTC Vouchers in the international market. The disinvestment of 5 million PTC Vouchers was about 9.8% of the total share of PTC. The Government fetched Rs 55 per share i.e. Rs.45 premium. The success of this placement was acclaimed throughout the world.

POWER SECTOR (WAPDA)

• The Peoples Government amended the WAPDA Act allowing the privatisation of WAPDA's thermal generation units and area electricity boards.

• The first power plant privatized by the Peoples Government met with astounding success. The Government sold 26% shares in the Kot Addu Power station for $215 million which was much higher than the expected price. The Peoples Government also transferred $750 million debt to the successful bidder.

B. PRIVATIZATION AGENDA 1997-1998

To complete the privatisation of all government owned projects within two years using the same transparent procedure as adopted for the PTC and the Kot Addu transaction. The receipts of these sales will be earmarked to retire public debt.