ISLAMABAD:Pakistan’s plans to sell stakes of its profitable energy companies to the United Arab Emirates (UAE) through the Pakistan Sovereign Wealth Fund (PSWF) have hit snags, as the government admitted that there was a lot of confusion and overlapping about the wealth fund.
“There are many confusions in the law [Sovereign Wealth Fund Act], therefore, it has not yet been made operational”, said Nasheeta Mohsin, the acting finance secretary, while briefing the National Assembly Standing Committee on Finance.
The meeting was chaired by Syed Naveed Qamar of the Pakistan Peoples Party (PPP). Qamar, a former finance and power minister, was part of the previous Pakistan Democratic Movement (PDM)-led government that had framed the Pakistan Sovereign Wealth Fund Act in August last year.
“The original idea of setting up the Fund was to sell the fund-managed companies to the Middle Eastern countries, but after that so much has happened and it did not materialise,” Qamar said. “The question is whether to retain the Sovereign Wealth Fund or not because there is so much overlapping,” he added.
The government’s first briefing on the affairs of the PSWF, which largely remains wrapped in secrecy, gave credence to the apprehension that the PSWF Act was passed by the government last year without putting much work in it.
“It seems the government does not have clarity on the functionality and the management of the Sovereign Wealth Fund and as a result the committee did not get a clarity”, Qamar said, adding that the PSWF was in direct conflict with the Privatisation Act and the State-Owned Enterprises (SOE) Act.
The PDM government had enacted the PSWF Act to transfer shares of seven profitable entities in the first phase and then sell them overseas to raise money. These entities include the Oil and Gas Development Company Ltd (OGDCL), Pakistan Petroleum Ltd, Mari Petroleum, National Bank of Pakistan (NBP), Pakistan Development Fund, Government Holdings (Private) Ltd, and Neelum-Jhelum Hydropower Company.
Last year, the UAE rulers had refused to give any new lending to Pakistan and instead asked Prime Minister Shehbaz Sharif to sell the stakes in its companies and also give seats to the UAE firms on these boards in return for equity investment.
