WB, govt discuss privatisation, focus on PIA, sick SOEs

ISLAMABAD: The World Bank and the caretaker Pakistani government on Thursday held discussions on the privatisation agenda with a specific emphasis on privatising Pakistan International Airlines (PIA) and other state-owned enterprises (SOEs), including power companies.

Federal Minister for Privatisation Fawad Hasan Fawad and World Bank Country Head Najy Benhassine also discussed improving the performance of power distribution companies (DISCOs) and the proposed plan of transferring their management to the private sector under long-term concession agreements.

Fawad also highlighted plans to develop a comprehensive PIA model with the World Bank as a potential future partner. Productive sessions with the International Finance Corporation (IFC) of the World Bank have focused on a long-term concession model to mitigate $2.5 billion annual losses of power distribution companies.

Ongoing discussions with the IFC aim to create a strategy for private sector involvement in DISCOs with the goal of reducing losses and enhancing performance. The matter of advisory and legal assistance as crucial aspects of the successful execution of privatisation were discussed. The concerted effort aims to address substantial financial losses incurred by these entities and alleviate the government’s fiscal burden.

Fawad said the federal government and all institutional stakeholders had unanimously agreed to privatise major loss-making SOEs already on the privatisation list, as they significantly drain government resources. PIA is at the top of the privatisation list due to its persistent financial losses, which amount to billions of rupees annually. The minister outlined the PIA’s privatisation plan, expressing the government’s intention to engage the World Bank and other financial institutions in the initial phases.

The World Bank’s director underscored the importance of collaboration and partnership between Pakistan and the World Bank in the privatisation process of state-owned enterprises (SOEs). With a positive outlook, the World Bank intends to provide extensive support and expertise throughout the process, ensuring that the privatisation efforts are not only successful but also contribute to the economic growth and stability of the nation.