Privatization process

The PTI government will restart the privatization process by selling six public entities, including the Pakistan Steel Mills, to make them more profitable and receive some much-needed revenue.

According to the latest programme, the government will privatize six loss-making public sectors entities including the Sindh Engineering, SME Bank, Guddu Power Plant, First Women Bank Limited, Jinnah Convention Centre, and the Pakistan Steel Mills. A strategic cell has been set up after over ten years to expedite the process by June 30.

Prior to the election, the PTI had stated that it will not privatize any ‘white elephants’ notably the PIA and the PSM, but the economic conditions have forced the government to sell off these entities. The government aims to gain over Rs150billion in revenue from the sale of these enterprises. It insists that relevant laws and court orders will be kept in mind, while the privatization process will be in line with the prime minister’s vision in 2018.

Minister for Privatization Mohammad Mian Soomro has said that government will first sell-off loss-making entities, and in the second phase will focus on those having potential but not generating income for some reason. These entities will be restructured through public-private partnership. The PSM, on the other hand, will also be finally privatized by the end of the year.

Privatization has remained controversial in Pakistan as government-owned assets are handed over to the private sector which includes funds to private companies. The first privatization process was initiated in 1991 during Nawaz Sharif’s era, but was mired with controversy and corruption allegations after entities were transferred to select families who have controlled the economy of Pakistan.

Privatization is often not viewed favourably as it means the loss of social security and causes employment. The PTI government must ensure that the mistakes of the past are not repeated and the privatization process is held in a transparent manner. The privatization policy should provide economic growth, bring in fresh investment, while also secure employment prospects.

The government’s aim to divest their stakes in OGDC, PPL, and auction 27 unproductive public real estate properties has raised eyebrows. Foreign investors from Dubai, Qatar and overseas Pakistanis have expressed interest in buying these properties. This should not be like the privatization of the PTCL in which a state asset was just handed over. Public sector institutions are bleeding financially and it is necessary to control them but the proper mechanism should be followed.