Lahore - The government is determined to privatise some 70 public sector entities which are losing about Rs 500 billion per year, turning a deaf ear to the opposition’s criticism that the plan will render tens of thousands of workers out of jobs.
The entities to be privatised include the Pakistan Steel Mills, the Pakistan International Airlines, Oil and Gas Development Company Limited and Pakistan Petroleum Limited.
The Economic Coordination Committee (ECC) of the Cabinet on Friday approved Rs18.5 billion bailout package for the Pakistan Steel Mills to restructure the national entity before its privatisation.
The privatisation plan without taking other steps that can take the losing state enterprises out of crisis is not only in conflict with the pre-election commitments of the PML-N leadership but also is a testimony that some individuals can do what the entire state can’t.
When the Sharif family was banished to Saudi Arabia in December 2000, they set up a huge steel mill in Jeddah. The family has vast experience in the steel industry because of which the unit has been giving excellent performance since its establishment. Hussain Nawaz, the elder son of Prime Minister Nawaz Sharif, is running the unit. He is based in Jeddah (although he also spares time to help the family take political decisions for Pakistan).
The Sharifs owned the Ittefaq Foundries, nationalised by the PPP government in early 70s. Although the industry was returned to the family during the Zia era, the Sharifs have always reviled the PPP leadership for its nationalisation policy which dealt a serious blow to the economy. But now they are going to privatise the country’s biggest steel unit without realising that if the nationalisation of the Ittefaq Foundries was unjustified so will be the privatisation of the Pakistan Steel Mills.
The Pakistan Steel, set up with Russian cooperation during the Zia era, is a losing concern, mainly because of the corrupt people appointed by various governments to run it. They could appoint any capable official to run it efficiently and turn it into a profit-making unit. But, regrettably, those appointed to set the situation right turned the unit into “Pakistan Steal Mills”.
No government, including the PML-N’s, has been able to find a person capable like Hussain Nawaz who can steer the steel unit out of the difficult situation. Maybe there’s none available, or no serious effort has been made for the purpose because of the vested interests of those in power.
The government, it seems, is deliberately allowing the PSM to slip into deeper crisis to find a justification to rob the state of this valuable asset – and give the same to its front men and cronies.
This doesn’t mean the previous rulers did not have ulterior motives about this giant steel unit.
Shaukat Aziz, as prime minister, had tried to sell the PSM for $300million, or Rs 18 billion as one dollar at the time was selling for about Rs 60. The move was blocked by the Supreme Court.
Now the Economic Coordination Committee has approved a Rs18.5 billion bailout package for the PSM to restructure it before selling it to private hands. In other words more money will be spent to restructure it than its total worth a few years ago. Is there still any more proof required to establish that the past and the present rulers have dishonest designs about the project?
The second state asset the government plans to privatise is the Pakistan International Airlines. Privatisation, the government argues, is the only way to save billions of rupees needed every year to meet the losses and keep the entity afloat.
The decision has been taken without first giving the professionals opportunity to set the situation right, as was committed by the PML-N leaders in its election manifesto.
In the cabinet of Prime Minister Nawaz Sharif there is a federal minister, Shahid Khaqan Abbasi, who is running his own airline quite successfully. If he can run his own airline profitably, why can’t there be another man like him who can take the PIA out of the crisis and make it a profitable airline?
Just to refresh the memory of readers, in its election manifesto, the PML-N had said this about the state-owned enterprises:
“PML-N will initiate following actions to turn around the loss making state enterprises:
Appoint independent and professional boards who in turn will appoint competent CEOs of state enterprises. Professional competence and merit will be the only criteria for appointment of boards and CEOs.
The immediate task of the boards and CEOs will be to manage these corporations effectively and to plug the losses.
Assign quantifiable targets and monitor on regular basis. Performance evaluation will be carried out on regular basis to ensure accountability.
Stop every kind of political interference in the affairs of these enterprises.
Undertake deep-seated and urgent reforms in the relevant sub-sectors.
Identify enterprises which need to be privatised and assign targets to the privatisation commission to ensure completion of the privatisation process within the assigned timeframe.
Operational standards will be prescribed and complete autonomy will be given to achieve them.
PIA shall be transformed into a profitable and reputed airline of the region”.
What is still more unfortunate is the fact that the apex court which in the past had been taking notice of even sugar prices remains unmoved when the rulers are determined to sell the state assets without first trying the corrective measures that can set the situation right. Either the apex court’s erstwhile activism was uncalled for or its present state of indifference is unjustifiable.