With the Economic Coordination Committees’ approval of a golden handshake for all employees of the Pakistan Steel Mills, it appears that the PTI-led federal government is finally moving towards a possible privatisation of the loss-making public sector enterprise (PSE). The Pakistan Steel Mills has been costing the exchequer billions of rupees each year for quite some time now due to chronic inefficiency and corruption.

Several governments have promised to overhaul the enterprise but none have been able to bring about any change. Instead, political parties have played politics on the matter, pretending to champion the cause of workers for a few votes while knowing fully well that the system is simply unsustainable.

What Pakistan Steel Mills and other PSEs such as the PIA and Pakistan Railways require is competent and professional management, where good performance is incentivised. Bureaucrats as public administrators are often only concerned about following the law and processes, not with results and outcomes. In the case of Pakistan, there is not even procedural compliance due to weak accountability mechanisms. The mill keeps incurring losses, the government keeps pumping money into it and everyone gets to keep their job and receives a paycheck. It has been six years since the mill has even been operational – 10000 employees have been kept on the books when nothing is actually produced. This is how business has gone on for far too long.

It is not unreasonable to be concerned over the loss of employment for thousands of workers. However, a well performing enterprise can contribute a lot both in terms of employment as well as taxes to the government; taxes that can be spent on schemes aimed at workers’ welfare and economic growth. The government should either go for public-private partnerships or complete privatisation to turn around non-performing PSEs – whichever option is ultimately most beneficial for the people of Pakistan.