Cabinet Committee approves privatization of National Power Construction Corporation, Heavy Electrical Complex

Islamabad: Cabinet Committee on Privatization CCOP in meeting Friday chaired by Finance Minister Dr Abdul Hafeez Shaikh approved privatization of National Power Construction Corporation NPCC and Heavy Electrical Complex HEC. It discussed Benazir Employees Stock Option Scheme BESOS.

CCOP approved two out of five recommendations made by Privatization Commission PC whereby Finance Division is to release Rs 10 million on annual basis for BESOS and Rs 1.00 billion demanded on actual basis to pay buyback claims in hand, a PC statement said.

CCOP allowed PC for sale of minimum 88% GoP shares in NPCC and divestment of minimum 96% GoP shares in HEC together with management control. It directed PPL Employees Empowerment Trust PPLEET to surrender bonus shares received by entity-based trust to PC. Under BESOS, 50% cash dividend is distributed among employees who receive free of cost unit certificates and shares retained by respective Trusts. Remaining 50% dividend is transferred to Central Revolving Fund for subsequent payment of buy-back claims. Scheme, as such, envisages 50% cash dividend distribution to employees and not distribution of 50% shares (including bonus shares) to them.

BESOS is designed as a special instrument, which operates under a dedicated framework approved by Federal Cabinet for ensuring transfer of 12% GoP shares to entity based Trust free of cost for specific period while employees given unit certificates in lieu of shares retained in respective Trusts. These are subsequently transferred back to GoP for buyback of claims of beneficiary employees. CCOP constituted sub-committee headed by Privatization Minister to further look into details of remaining three to four recommendations made by PC.

HEC is one of industrial units of State Engineering Corporation SEC manufacturing power transformers of different types with primary voltage rating of 66 & 132KV, repair, refurbishment of old, damaged power transforms up to 500KV. It commenced full-scale commercial operation in 1997. HEC included in privatization program since 2005 is located in Hattar Industrial Estate about 65km from Islamabad, spread over 72.489 acres with six main manufacturing shops. It has oil purification shop, high voltage test laboratory equipped with 250 tones overhead travelling crane. It can diversify its manufacturing range by including other products like instrument transformers, high voltage circuit breeders, other grid stations equipped for meeting demand of products in domestic, foreign markets.

NPCC set up in 1974 by the Government under Federal Water & Power Ministry, is registered under Companies Ordinance 1984, with branch office in Saudi Arabia undertakes execution of large power construction projects, high, low voltage lines, distribution networks, electrification of large housing, commercial projects on turnkey basis in Saudi Arabia.

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