PC transfers Rs 11.2b to govt for poverty alleviation

By Sajid Chaudhry

ISLAMABAD: The privatization commission (PC) has transferred Rs 11.212 billion to the government of Pakistan during 2003-04 for debt retirement and poverty alleviation program, said approved audited accounts of the commission released here on Thursday.

The annual account report said the commission also remitted Rs 12.573 billion during last fiscal year to the State Bank of Pakistan (SBP) and Investment Corporation of Pakistan (ICP) for sale of their shares in different entities out of the total sale proceeds that stood at Rs 33.252 billion, 49.7 percent higher than the previous year, the report said.

In addition, an amount of Rs 1.786 billion has been paid to the different banks for the settlement of the liabilities of units of Ghee Corporation of Pakistan (GCP), the report added.

According to the approved accounts 2003-04”, the commission has successfully completed the privatisation of eight transactions including the privatization of Habib Bank Limited (HBL), AC Cement Rohri, Thatta Cement Limited, Kohinoor Oil Mills, and capital market transactions of OGDCL, SSGC, POL, ARL, DG Khan Cement and the National Bank Pakistan (NBP).

According to an official at the PC the commission has realized an amount of Rs 520.323 million against outstanding receivables through encashment of bank guarantees given by the buyers of National Fibres, National Cement Dandot and Balochistan Wheels. These units were privatized in 1992 and 1995. However, the buyers failed to make the required payment to the commission against the bank guarantees.

The auditors reviewed the financial statements for the year 2003-04 and the outstanding qualifications on the accounts of the year 2002-03 pertaining to loans to the PC from government of Pakistan and inadequate provision of doubtful receivables.

The auditors noted in absence of the loan agreement between government and the PC, it was not possible for them to verify the loan and the related terms and interest, if any, payable on these loans.

The auditors took up the issue with economic affairs division (EAD) to determine the status of the loan and its terms and references (TORs). The EAD confirmed the loan as grant and accordingly, the change has been incorporated in the PC accounts.

As regard the qualification pertaining to inadequate provision against doubtful receivables, an additional amount of Rs 538.164 million is being provided in the accounts for the year 2003-04.

The auditors have termed this provision as ‘inadequate measure’ and maintained that the buyers dispute the receivables and there is continued litigation for recovery of the dues. However, the commission would carry out detailed analysis of outstanding receivables each year and provide for the doubtful receivables over the period of three to four years.

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