Public sector entities sell-off must to overcome huge losses

Comment

LAHORE: Pakistan has suffered immensely due to successive governments’ failure in revamping or privatising public sector entities.

The power sector distribution companies suffered a loss of around Rs500 billion/annum, including non-receivable amount that seemed impossible to recover.

Thousands of employees are associated with the national flag carrier, Pakistan International Airlines, Railways and Pakistan Steel Mills, but all these entities are incurring billions of rupees losses to the government and, if the situation persists, the total losses would touch around Rs1 trillion/annum.

Certainly, the successive governments’ have failed in developing a proper mechanism to deal with the public sector entities, as in other countries such entities are operating smoothly.

The Railways in India was revamped by the then Railways minister Lalu Prasad Yadav by ensuring that mistakes made in the past were not repeated.

We have spent billions of rupees on revamping every government-owned commercial operated enterprise, but no improvement was seen in their working or reduction in losses.

There are competent professionals in Pakistan that have the capability to make government enterprises efficient, but to no avail.

To overcome huge losses, the government would have to muster the courage and remove all political appointees that have been inducted in these organisations without any merit.

The boards of these organisations should have professionals appointed on merit without the interference of the government or bureaucracy.

To improve the condition, the government should have to ensure that no serving or former bureaucrat becomes part of these entities and the board should be fully empowered and accountable.

There should be no government interference in the award of contracts or in appointment and the entity should not be overlooked by any ministry.

Revamping of these institutions would require sweeping powers that would require changes in some laws, as well.

Without enjoying the same powers that are enjoyed by the boards and CEOs of the private sector entities, the management of public sector entities would not be able to deliver.

Under the current circumstances, privatisation of larger loss-making public sector entities seemed impossible, as provincial and federal governments have their own reservations on the privatisation of Pakistan Steel Mills and Pakistan International Airlines.

The only option left is to revamp them prudently by taking all political forces into confidence. Even getting rid of political appointees would need consensus.

During the last PPP government all political appointees removed by the PML-N government in 1997 were reinstated, which accelerated the deterioration in the public sector entities.