Privatisation of LNG power plants delayed

By Asad Cheema

ISLAMABAD: In a bid to keep foreign investors engaged, Pakistan on Saturday hinted at extending the timeline for privatization of two liquefied natural gas (LNG)-fired power plants in the wake of coronavirus outbreak that has affected its multibillion-dollar programs.
Federal Minister for Privatization Mohammad Mian Soomro has indicated that the government will review and reconsider the timeline for privatization of LNG-based power plants, based on facts and situational analysis and rapidly changing national and international market scenarios, according to a statement issued by the Ministry of Privatization.
In the wake of coronavirus pandemic, pre-qualified bidders asked for extension in the timeline, it added. Prospective investors could not inspect the power plants due to the closure of businesses and halt to international flights. This has made the government’s April 15 deadline to hold a pre-bidding conference unrealistic. The Privatisation Commission had invited Expressions of Interest (EOIs) in November last year, offering local and global investors two power plants of 2,500 megawatts, fuelled by Qatar’s LNG.
Pakistan hopes to get proceeds of about $1.5-2 billion from the sale of these assets, built during the tenure of Pakistan Muslim League-Nawaz (PML-N) government. The original timeline for selling the power plants was December last year, which was unrealistic due to a host of issues linked with one of the largest privatisation transactions. The government has included LNG plants’ privatisation proceeds in the FY20 budget in order to meet International Monetary Fund (IMF)’s fiscal targets. The two power plants run on LNG that Pakistan imports from Qatar under a 15-year deal, signed in 2015.