THE Government seems determined to go ahead with its plans for privatization of the state-owned enterprises as it has approved a five year programme (2024-2029) for the purpose envisaging divestment of twenty-four institutions and addition of more after the review. The programme, approved by the Federal Cabinet, includes privatization of nine power distribution companies and four power generation companies. Privatization process for PIA and House Building Corporation would be completed soon while Utility Stores Corporation, State Life Insurance Corporation and Pakistan Reinsurance Company are also included in the list.
At the policy level, there is a sort of consensus on the issue of privatization of SOEs as almost all successive governments in the past pursued the programme with varying degrees of interest and success. However, there are serious concerns among the general public because of deviation from the original objectives of the process and questionable modus operandi raising questions about merit and transparency of the exercise. This is because the programme was initiated on the plea to get rid of the loss-making institutions but every time we ended up in selling out the family silver. It is also a reality that several profitable entities were sold in haste and they fetched proceeds much less than their market value, benefiting the buyers but inflicting heavy losses on the national exchequer. Now again, there could be justification for privatization of institutions like the PIA, HBFC, USC, State Life Insurance Corporation and Pakistan Reinsurance Company as they were either not reformable or their functions could be performed by the private sector in a better manner. It is, however, intriguing that the most efficient power distribution companies like IESCO, FESCO and GEPCO are to be sold first and the Government would keep control of the notorious ones forcing the general public to keep on paying for their inefficiency and alleged rampant corruption. The strategy of the Government is understandable as privatization of the efficient discos could generate keen interest in the buyers’ market but what benefits will accrue to the country except transitory gains of bridging the budgetary deficit. Everyone lays emphasis on transparency but this is still missing in the privatization programme and a course correction is needed.
