Privatisation of utility services organisations in Pakistan failed to deliver as both income and efficiency

Privatisation of utility service organisations rejected : Privatisation of the utility services organisations in Pakistan failed to deliver as both income and efficiency : Jang Economics Session on Privatization of Public Sector Enterprises & National Expectations
LAHORE (Friday, September 9, 2011): Privatisation of the utility services organisations in Pakistan failed to deliver as both income and efficiency did not increase while all the public sector enterprises could be made profitable with transparent policies and no political interference.
These views were expressed by the participants in Jang Economic Session on Privatization of Public Sector Enterprises & National Expectations here on Thursday. The participants were Wapda ex-member power Tanzeem Hussain Naqvi, Lahore Chamber of Commerce and Industry Senior Vice-President Sheikh Muhammad Arshad, economist Dr Nadia Saleem, Employers Federation of Pakistan member Iftikhar Mehmood Randhawa and Gujrat Chamber of Commerce and Industry ex-President Mirza Imtiaz Ahmed. The session was hosted by Sikindar Hameed Lodhi and Intikhab Tariq.
Tanzeem Hussain Naqvi said power companies should not be privatised. He said the Karachi Electricity Supply Company was established in 1913 and till 1996, it was not in loss but the company with Rs 225 billion assets was sold for just Rs 80 billion. He said the KESC was run by army management for five years and faced Rs82 loss while annual loss of the company was over Rs16 billion. He said production capacity of the KESC did not increase while power theft was not controlled. He said that in 2008-09, revenue collection through electricity bills was Rs358 billion which was now Rs556 billion despite 150 percent increase in tariff while revenue collection declined by 45 percent.
Naqvi opined that complete privatisation of power sector would further inflate tariff which would be unbearable for consumers. He said circular debt was the result of purchase of costly electricity. He said the country had a potential of 60,000 megawatt from hydel and 100,000 megawatt from coal but it didn’t tap its resources while India produced 36,000 megawatt from hydel and 56,000 megawatt power from coal.
Sheikh Arshad said that blind privatisation was dangerous for the country. He said the government had decided to disburse Rs250 billion to the public sector enterprises and if it would privatise them, the process would save Rs 250 billion but lose Rs 500 billion. He said experience of private airlines had failed in Pakistan while in the US and Europe, governments ran airlines. He said complete privatisation of the PIA would create monopoly which would not be in favour of Pakistan. He said experience of operating trains by the private sector had also failed, adding that out of Rs 47 billion bailout package of railways Rs11 billion would be paid to pensioners. He said the government spent Rs30 billion on the UBL while it was sold in Rs15 billion while assets of Pakistan Steel Mills were over Rs100 billion but auction bid would not be more than Rs20 billion.
Dr Nadia Saleem said that from 1991 to 2010, Rs 476 billion were received by the government through privatisation which were peanuts for the national economy. She said highly profitable institutions were privatised which had badly affected tractor, banking, oil and fertilizer sectors.
Iftikhar Mehmood Randhawa said that private and public sectors grew in a conducive atmosphere. He said political interference should be avoided in public sector enterprises, adding that the sector did not make long term policies due to which it was facing problems.
Mirza Imtiaz Ahmed said privatisation of public sector enterprises was a sensitive issue. He said there were question marks over successive governmentís privatization process.
He said Rs8.5 billion profit making PTCL was also privatized, running businesses was not government affair so the government must get rid of them. He said profit making companies were bearing liabilities of loss making power companies.
(Published in “Daily TheNews”)

One Comment


  1. sir 2 year commerce ka result kb tk ae ga plz tell me

Leave a Reply