Amir Khan

The government is actively pursuing the privatization of key state-owned enterprises (SOEs), with the primary focus on the Pakistan International Airlines (PIA), Dr Jameel Ahmed, Financial Analyst at the Ministry of Commerce, told WealthPK. "Currently, Pakistan has five airlines, four of which are privately owned. Despite offering similar services and charging comparable fares, the private airlines turn profits and contribute to taxes. In contrast, the PIA incurred a staggering loss of Rs88 billion last year on sales of Rs172 billion, resulting in a daunting 51% loss on sales. The accumulated losses amount to an alarming Rs717 billion, with a present value exceeding Rs900 billion," he added. He highlighted that the massive sum of Rs900 billion could be used for transformative projects, equivalent to constructing 15 Aga Khan University Hospitals, or 18,000 schools nationwide. Advocates argue that privatizing PIA is imperative for the benefit of Pakistani taxpayers, given the airline's persistent financial woes and its potential to safeguard job security for the employees. He pointed out that the call for privatization extended beyond the PIA to include the national railway monopoly — the Pakistan Railways. Despite receiving substantial government subsidies, the railway system consistently operates at a loss.

"With a proposal to borrow an additional $7 billion for new tracks, questions arise about the efficiency and viability of the current approach. Critics argue for a paradigm shift, advocating the privatization of both tracks and trains to multiple operators, with the ministry adopting a regulatory role to ensure safety standards and fair charges," he further pointed out. This also scrutinizes the long-standing predicament of the Pakistan Steel Mills (PSM), which has remained closed for eight years while employees continue to draw salaries. Jameel suggests compensating for the PSM's debt by allocating its remaining land to the National Bank and Sui Southern. He continued that this land, spanning approximately 8,000 acres, could be sold to partially recover the outstanding dues, while the steel mill itself, a Russian-made relic from the 1960s, could be sold or leased for potential revival. The overarching agenda behind these privatization initiatives is to curb losses and revive the economy. He emphasized the need for private sector investment and well-regulated markets. Proponents believe that privatization is the key to turning the SOEs into profitable entities that benefit both the consumers and taxpayers. Concluding, he said as the government takes bold steps toward economic reform, the eyes of the nation remain fixed on the potential outcomes of these crucial privatization actions.

Credit: INP-WealthPk