Finance Minister Ismail had included the earnings from the sale of the LNG power stations in his $8.5 billion foreign inflow forecasts for this fiscal year in order to achieve the $35 billion gross external finance requirements.

The Pakistani government has scrapped plans to sell two LNG-fired power units to Qatar, offering 51% shares in the Roosevelt Hotel in New York and Pakistan International Airlines (PIA) instead, reported The Express Tribune.

Prime Minister Shehbaz Sharif made these decisions during a meeting called to prepare for his journey to Qatar next week, which is provisionally scheduled for August 22 to 23, according to sources.

The meeting was also attended by Finance Minister Miftah Ismail and former Prime Minister Shahid Khaqan Abbasi.

They stated that the premier has also formed a committee to finalise these recommendations by the end of this week and finish all documentation before his departure to the Gulf state next week.

According to the sources, the group examined the prospect of selling the two LNG power stations to Qatar. However, several participants believe that Islamabad may not get the best price after deducting the Rs104 billion debt owed by these power plants, which need to be repaid or transformed into long-term finance.

They stated that after removing the liabilities, the government may obtain $500 million to $600 million at best, which was politically difficult to present to the people as the best price.

The National Power Parks Management Company Limited (NPPMCL) owns 1,230 megawatts (MW) Haveli Bahadur Shah and 1,223 MW Balloki power plants. These power plants were set up with government funding instead of the 70:30 debt-to-equity ratio.

The Ministry of Finance had bought the equity of these power plants a few years ago through the Pakistan Development Fund proceeds.

According to the sources, the government’s debt of Rs103.7 billion must be replaced by bank borrowings, which will significantly decrease the ultimate price. The 70% cost of the projects must be turned into long-term finance for power plant privatisation in accordance with the tariff-based capital structure.

A senior government official meanwhile said price discovery for the LNG facilities was not immediately achievable, noting these projects may not be given to the Qatari government for investment purposes.

Finance Minister Ismail had included the earnings from the sale of the LNG power stations in his $8.5 billion foreign inflow forecasts for this fiscal year in order to achieve the $35 billion gross external finance requirements.

According to the sources, the administration also considered requesting the Qatari government to establish a $1 billion food and livestock security fund for investment in Pakistan with the goal of manufacturing items in the Asian country and exporting them to the Gulf state.

Qatar wanted to acquire land in Pakistan for agricultural purposes, but provincial restrictions made direct ownership impossible, the report claimed.

Sharif is expected to travel to Qatar in order to address LNG supply shortages brought on by escalating prices on the international market.

Sharif, who is leading Pakistan’s new government, has had to deal with a gasoline crisis that has resulted in blackouts in several areas of the nation.