1. By Sarah Ahmed

2.  PTCL, by far, has been the highest profit earning state-owned company with real estate assets worth billions of rupees across the country including commercial plazas, residential colonies and exchanges.  The reason given by government to privatize PTCL was to create an environment where the policies and processes don’t allow discretion by the politicians and the civil service.

3.  The process started in November 2004,  Early in January 2005, 18 companies registered their EOI (Expressions of Interest), out which 3 bidders qualified for the final bidding which held on June 18, 2006. 1. Consortium of Emirates Telecommunication Corporation (Etisalat) 2. Dubai Islamic Bank, 3. Etisalat International Pakistan (EIP)

4.  Secret Price Discount Worth Millions  Huge Costs of Employee Layoff  Payments Allowed In Instalments & 100% Property Transfer  Burden Of Huge Liabilities  Management Fee To Etisalat  Huge Technical service Payments

5.  Sale at a price much below the worth  Full Control Of Management for just 26% Shares.

6.  PTCL could have generated huge profits if the government managed the company efficiently.  There were other options apart from privatization.  Further the privatization of PTCL didn’t affect market competition largely because the government had already passed Telecommunications De-regulation Law in 2003.  All PTCL needed was good corporate governance

7. By Syeda Sara Tazeen Jaffer

8.  The Karachi Electric Supply Company Limited was incorporated on 13 th September 1913 under the Indian Companies Act, 1882 as amended to date vide the Companies Ordinance 1984  The Company is principally engaged in generation, transmission and distribution of electric energy to industrial, commercial, agricultural and residential consumers under the Electricity Act, 1910 as amended to date & NEPRA Act 1997

9.  In 2003, the Government decided to privatize KESC through a transparent, competitive bidding process, which was supported by the Asian Development Bank (ADB) through the Energy Sector Restructuring Program  The privatization process was successfully concluded in December 2005, when the Government transferred 73% of KESC’s shares to a consortium of investors led by KES Power Limited (KES Power), 60% owned by Al-Jomaih Holding (Al Jomaih), a Saudi industrial group, and 40% by National Industries Holding, a subsidiary of one of the largest Kuwaiti industrial and financial conglomerates

10.  The support group of KESC privatization was on the opinion that the privatization of KESC will bring better services through professional management, new investment, and technology and employment benefits  20 per cent increase in salaries to the contract employees and 10 per cent shareholding of KESC to the employees  Send strong signal to the investors and would speed up and also give impetus to the overall Privatization programme

11.  KESC under the dynamic and professional management would grow and touch new height of standards in terms of improvement in administration and customer services, un-interrupted supply of electricity to the domestic, commercial and industrial consumers  The main objectives of the project were:  Increase in power supply to meet current deficit;  reduction of technical and commercial losses;  Improvement in the quality of service  Reduction in fuel costs by using an efficient combined cycle plant in expansion of generation  Improvement in internal work processes  Promotion of better public relations and client satisfaction.  of Karachi at competitive rates

12.  Opposition alleged the privatization process was not transparent as the national interest and interest of the employees were not protected and national entities were being sold out at throwaway rate  Amount collected from privatization process was neither being used for repayment of debt nor it had helped alleviate poverty. Therefore, no budgetary allocation be made for privatization commission  Foreign interference in the future was inevitable

13.  KESC could not keep pace with growth in demand (since 2000, electricity units billed have increased 45%, while virtually no investment has been made in the T&D network)  KESC faced severe media criticism and high customer dissatisfaction, eventually resulting in civil disturbance and demands that the Government reconsider the privatization  It was supported by a program of investments (the investment plan) of some PRs52 billion ($809 million) for FY2007–FY2009, which includes the following main components:  Generation capacity additions of 780MW2 in two new combined-cycle power plants on existing sites (PRs34 billion/$525 million),  Rehabilitation and improvement of the T&D network (PRs17 billion/$268 million)  Rehabilitation of existing generation facilities (PRs600 million/$10 million)  Upgrading of commercial systems (PRs400 million/$6 million)

14.  Demand Issues: as of 2006 total demand was around 67,000 GW  Supply Issues: Pakistan has a total installed power generating capacity of 19,450 MW as per 2006: WAPDA provides 11,369 MW (58.4%), the IPPs 5,833 MW (30%), KESC 1,756 MW (9%), AJK Hydro Electric Board 30 MW (0.2%), and Government-owned nuclear power plants 462 MW (2.4%). Hydroelectric generation capacity represents about 6,499 MW, or 33.4% of total installed generation capacity

15.  Interruptions in supply  Lack of new power projects  Transmission and Distribution losses: 35% in 2006

16.  73% of the company's shares were sold at Rs. 1.65 per share amounting to R.s 20 billion. After the process was over, the government returned Rs. 5 billion to the new management of K.E.S.C for re-structuring and improvement plans  The government was giving the organization a subsidy of Rs. 6 billion, the government was giving the organization a subsidy of Rs. 6 billion  Losses increased from 16billion to 20billion in a year.  The buyers Al-Jumaiyah have further sold 23% shares out of their 73% holding to a Kuwaiti Nasr Al-Mari at Rs. 4 per share. The above indicators all point to the fact that Al Jumaiyah has recovered more than they invested

17.  While taking over the Corporation, the company had made a commitment of making an investment of dollars 361 million out of which it has brought an investment of dollars 81 million  Government has taken on their loan of 120billion and given another Rs 31 billion to facilitate the company