Hemorrhaging public sector enterprises takes a heavy tool of national revenues every year and their sale value is also fast depreciating. But offloading the financial burden of losses incurring state entities has not been seriously taken by successive governments. In the present government also, the fate of 56 such entities has not been decided in several meetings that had been held by the Privitisation Commission for this purpose.
Irked by the snail pace of privitisation process, Prime Minister Imran Khan chaired a meeting of concerned ministries which was attended by Minster for Privitisation Muhammad Mian Somoro, Planning Minister Asad Umar; Advisor on Finance Dr. Abul Hafeez Sheikh, Advisor on Commerce, Textile and Production Abdul Razak Dawood and Special Assistant for Information and Broadcasting Firduos Ashiq Awan. He directed for completing the privitisation process, particularly of huge losses making ones and unused state properties, within the stipulated time by maintaining close inter-ministerial coordination.
The Council of Common Interest had approved 62 public sector entities for privitisation in its meeting of October 2018. But on the contrary, Privitisation Commission opted for a skewed policy and picked 11 profit making enterprises for disinvestment; put the privitisation of 24 non-profit state entities on the back burner; and dropped 29 bleeding enterprises from the privitisation list. The disinvestment of profit earning state enterprises provides easy money that may or may not help in small reduction in fiscal deficit. The closed and running into huge losses enterprises push up budget deficit which may reach to 7 percent plus of the GDP during current fiscal year. The annual losses of inefficient public sector enterprises stand at Rs. 400 billion and cumulative losses have reached to Rs.1.8 trillion. Trade bodies have voiced grave concern over the wastage of taxpayers’ money on these corporations.
The governments of other PPP and PML-N had adopted divergent policies on the losses incurring state entities. The leadership of PPP used these organisations as political support base and recruited crowds of party workers in them in addition to placing their cronies in the top management cadres, allowing them hefty salaries and perks at the cost of national kitty. Hence the reaction of PPP Chairman Bilawal Bhutto Zardari to the directive of Prime Minister about fast-tracking privitisation process is understandable. Addressing a ceremony in Lahore, PPP young Chairman said that his party will not allow what he called selling of state assets. Who is he fooling with this sort of rhetoric? It was the policy of nationalization of private industries and banks in the first PPP government in 1972 that ruined the economy by scaring away private investment and initiatives of entrepreneurial class for induction of latest technologies and products’ innovations.
The PML-N and PML-Q governments pursued a policy of selling profit making state enterprises at throw away prices to their business partners. An amount of Rs.4 billion is still outstanding against the buyers of 14 public sector industrial units the ownership of which was acquired in the first two tenures of PML-N governments. In the PML-Q government in 2006, the management of golden eggs laying hen like PTCL was handed over to UAE Telecom Company Etisalt on the purchase of 25 percent shares, violating the standard procedure of transferring management on the acquisition of 51 percent shares. The entire sale proceeds of 2s percent shares were also not retrieved and $800 million had remained outstanding. Since then the matter of clearing PTCL arrears was not taken up by the previous two governments, while giving precedence to vested interest and jeopardizing national interest. The present government took up the issue and now Etisalt has offered to settle the outstanding claim of Pakistan for $250 million. Perhaps the Privitisation Commission still wants to sell out profitable state enterprises instead of selecting losses making entities for privitisation.
