ISLAMABAD  - The PML-N government has approved the strategic sale of Heavy Electrical Complex (HEC) that would generate Rs 905 million for the national kitty, starting the privatisation of loss-making public sector entities after nine years.

“The Cabinet Committee on Privatisation on Thursday approved strategic sale to Cargill Holdings Limited which was first strategic sale after last 9 years”, said Chairman/ State Minister for Privatisation Mohammad Zubair while addressing a press conference. Sharing the details of privatisation of the public sector entity, Minister of State said that Cargill Holdings Limited, buyer of HEC, has also accepted the liabilities of Rs.435 million besides Rs.250 million in cash `up front’ and in addition, another Rs.30 million to cover employee gratuity and provident fund obligations.

 The new owner would forego tax benefits associated with five years of losses amounting to Rs.190 million besides installing new machinery as current installed system was able to run the HEC only on 20-30 percent of capacity, he added.

The HEC is engaged in the manufacturing of power transformers with annual capacity at 3,000MVA and is spread over 61 acres. It is worth mentioning here that Cargill Holdings was the sole bidder as the other two shortlisted parties did not deposit the earnest money. The HEC was one of the public sector entities that are burdened on the national exchequer, as it had faced over Rs 120 million loses during last year and Rs 40 million during last six months of current financial year.  

Before the privatisation of HEC, the PML-N government had divested the shares of three entities including United Bank Limited, Allied Bank Limited and Pakistan Petroleum Limited in last several months. The government had planned to privatise 68 public sector entities during in its five years constitutional tenure. Minister of State informed the media that currently as many as 20 public sector entities are on the privatisation active list, which included power generation and distribution companies, Pakistan International Airlines, Pakistan Steel Mills, Habib Bank Limited and others.  Mohammad Zubair informed that government would complete the privatisation of two entities HBL and National Power Construction Company before June this year. The government would hold the road show for HBL from March 29 and  the government hopes to receive $1.2 billion from the transaction. He further said that government was negotiating to get $800 million outstanding amount from Etisalat.