The Privatisation Commission auctioned off the Services International Hotel in Lahore on Thursday (26 August) for the highest bid of Rs1.951 billion against the reserve price of Rs1.949 billion, raising some concerns with the minor gap between the two prices.
According to an official notification, only two bidders participated in the auction, and Faisal Town Pvt Ltd, a well-known real estate developer in Lahore, emerged victoriously.
Federal Minister for Privatisation Mohammad Mian Soomro, who presided over the auction, called it a triumph for the Privatisation Commission and stated that the government believed in merit and openness in the auction of state-owned properties. He stated that the sale raised more than the base price and that the auction’s principal goal was to lower the country’s debt-repayment burden.
According to sources inside the Privatisation Commission, the reserved price was determined based on market valuation because the Services International Hotel was not operational.
The small gap between the final bidding price and the reserved price, on the other hand, has raised the ire of impartial observers, given the property’s great location on Upper Mall, which is sprawled across 15 canals and surrounded by some of Lahore’s busiest thoroughfares. The property is conveniently accessible via a variety of roads.
The Lahore Development Authority has granted the site commercial status, permitting construction of all asset classes in the area.
According to the rule, the successful bidder of the auction will now have to pay 30% of the amount in the 20 working days of the issuance of the letter of acceptance. The remaining 70% will have to be paid within 60 working days of issuance of the letter of acceptance.
According to the privatization minister, the auction process of state-owned properties in the country is being carried out transparently on the orders of Prime Minister Imran Khan.
Additionally, he said that the government is planning to privatize all public sector departments which are currently working in the loss. Following departments are added to that plan:
- Pakistan Steel Mills.
- Mari Petroleum.
- Jinnah Convention Centre, Islamabad.
- SME Bank.
- First Women Bank.
- PPL.
- Guddu Power Plant.
- Heavy Electrical Complex.
The privatization minister also added that due to Covid-19, the government had to face some financial problems but now everything is back on track with noticeable progress in exports.
He stated that the process of privatizing the Balloki and Bahadur Shah power plants had been delayed due to Covid-19 because international investors wanted to visit the plants in person, which was not possible due to travel advisory restrictions, but that the matter was back on track and the transaction would be completed within the time frame specified.
Mr. Soomro said about the privatization of Pakistan Steel Mills that the expression of interest from investors would be invited soon.
