Islamabad, 14 May 2024 (TDI): Prime Minister Shehbaz Sharif instructed on Tuesday the Privatisation Commission to privatize all state-owned enterprises (SOEs), excluding the strategic ones, regardless of their profitability or financial losses.
He said this while presiding over a “high-level” meeting to review the Ministry of Privatisation and Privatisation Commission matters.
Prime Minister Shehbaz directed all the federal ministries to carry out the necessary procedures and extend their cooperation with the Privatisation Commission for the purpose.
The premier’s directives come two days after Finance Minister Muhammad Aurangzeb told a pre-budget conference that there was no such thing as strategic SOE.
“Dar Sb chaired the Cabinet Committee on Privatisation meeting on Friday.
He said we are absolutely on the same wavelength that there is no such thing as strategic SOE.”
According to Aurangzeb, there would be public-private partnership and we will accelerate the privatization agenda.
He added that local investors were bidding for the Pakistan International Airlines and the Islamabad International Airport.
In the meeting, the ministry and the commission presented a roadmap for the Privatization Program 2024-29.
The prime minister stated that the government did not run the businesses but had a mandate to facilitate the investors.
He was of the view that the privatization of SOEs would save the taxpayers’ money to help the government provide quality services to the people.
While reiterating the government’s commitment to a transparent process.
The prime minister directed his team to live telecast the bidding and other procedures of the privatization of Pakistan International Airlines and other entities.
SOE Privatization Progress
During the briefing on the progress in the SOEs’ privatization, officials informed the participants that they would complete the pre-qualification process for PIA privatization by the end of this month.
The consultation for the privatization of the Roosevelt Hotel was underway and the government-to-government transaction of the First Women Bank was in process with the United Arab Emirates.
They added that they had included the power distribution companies (DISCOs) in the Privatization Program 2024-29 and they would prioritize the privatization of loss-making SOEs.
They added that the commission would appoint a pre-qualified panel of experts for a swift and transparent privatization process.
Federal ministers Khawaja Asif, Muhammad Aurangzeb, Jam Kamal Khan, Awais Ahmed Leghari, Abdul Aleem Khan, Musaddik Malik and Ahad Khan Cheema, Prime Minister’s Coordinator Rana Ehsan Afzal, and relevant senior officers attended the meeting.
Patchy Privatization
Past privatization drives have been patchy, mainly due to a lack of political will, market watchers say.
Any organisation that is involved in purely commercial work can’t be strategic by its very nature.
Which means there can’t be any strategic commercial SOEs, former privatization minister Fawad Hasan Fawad told Reuters on Tuesday. “So to me there are really no strategic SOEs,
“The sooner we get rid of them the better. But we have heard a Prime Minister say this before, and we may hear it again until someone translates these words into a strategic action plan and implements them.”
Islamabad has for years been pumping billions of dollars into cash-bleeding SOEs to keep them afloat, including one of the largest loss-making enterprises Pakistan International Airline.
Which is in its final phase of being sold off, with a deadline later this week to seek expressions of interest from potential buyers.
Pakistan has listed 25 entities and assets on its privatisation list, including the PIA.
A majority of the entities are in the power sector, including four power plants, two of which are over 1,200MWs, as well as 10 generation and distribution companies.
The list also includes the valuable Roosevelt hotel in New York’s Manhattan and two insurance companies.
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The privatization ministry informed Tuesday’s meeting that it will complete the pre-qualification process for PIA’s selloff by end-May.
Furthermore, adding discussions were underway to sell the airline-owned Roosevelt Hotel in New York.
It said that the United Arab Emirates was discussing a government-to-government transaction on First Women Bank Ltd.
Moreover, it also added that the privatization plan for 2024-2029 included power distribution companies.
Prime Minister Shehbaz Sharif said, “We should prioritize the privatization of loss-making SOEs.”
