Pak Cabinet approves ordinance to bypass procedures for emergency sale of state’s assets to foreign countries to prevent default

Islamabad, Jul 23 (PTI) Cash-strapped Pakistan’s Cabinet has approved an ordinance to bypass all procedures and abolished regulatory checks for the emergency sale of state’s assets to foreign countries, according to a media report on Saturday, as the country tried to avert a looming default.

According to the Inter-Governmental Commercial Transactions Ordinance 2022, which was approved by the federal Cabinet on Thursday, the government has also barred the courts of the country not to entertain any petition against the sale of assets and shares of the government companies to foreign countries, The Express Tribune newspaper reported.

The decision was taken in a bid to sell stakes of oil and gas companies and government-owned power plants to the UAE to raise USD 2 billion to USD 2.5 billion to avoid the looming default.

Through the ordinance, the Centre has also empowered itself to issue binding instructions to the provincial governments for land acquisition, the report said, citing content from a copy of the ordinance.

But President Arif Alvi has not signed the ordinance yet, it said.

The UAE in May refused to give cash deposits to Pakistan due to Islamabad’s inability to return previous loans and instead asked to open its companies for investment.

Finance Minister Miftah Ismail had said this week that it usually took 471 days to complete one privatisation transaction.

He had added that the government had to conclude deals with foreign countries in days to urgently raise funds.

The International Monetary Fund (IMF) has placed a condition that Pakistan’s case could not be taken to the Board until it arranged USD 4 billion from friendly countries to bridge the financing gap, the report said.

Pakistan recently struck a staff-level agreement with the IMF for the disbursement of USD 1.17 billion under resumed payments of a bailout package.

Pakistan’s rupee shed 8.3 per cent of its value this week — the steepest since November 1998, indicating the gravity of the challenges that the government of Prime Minister Shehbaz Sharif is facing.

However, the ordinance has raised many transparency concerns, including the determination of the prices of the shares of the Mari Gas Company, Oil Gas Development Company Limited and Pakistan Petroleum Limited amid their low market price compared with their book values.

The ordinance will provide for a mechanism to carry out a commercial transaction under an inter-governmental framework agreement to promote, attract and encourage foreign states to have economic and business relations with Pakistan, according to the documents.

The Cabinet Committee on the Inter-Governmental Commercial Transactions will be formed that will have sweeping powers, including those overriding six Acts of Parliament.

The ordinance makes the federal Cabinet so powerful that it can even issue binding instructions to provinces to hand over any piece of land and enter into a transaction with a foreign state, the report said.

The cabinet committee’s decisions can neither be challenged in the courts nor any investigation agencies open those deals, according to the ordinance documents.

The federal government can exempt any intergovernmental commercial transaction from the regulatory requirement or operation necessitated by any law for the time being in force for the purposes of this ordinance.

This sweeping clause has been introduced to shorten the sale of the government shares by overstepping the Companies Act, Securities and Exchange Commission Act, Privatisation Ordinance and other relevant laws, according to The Express Tribune.