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PTI govt plans to sell 10 more entities

Shahzaz ud din

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PTI govt plans to sell 10 more entities
Privatisation list includes ZTBL, USC and two gas utility companies


Shahbaz RanaJanuary 23, 2021

prime minister imran khan photo radio pakistan

Prime Minister Imran Khan. PHOTO: RADIO PAKISTAN
ISLAMABAD:
The Pakistan Tehreek-e-Insaf (PTI) government is considering privatising 10 more entities including Zarai Taraqiati Bank Limited (ZTBL) and two gas utility companies amid slow progress on one and a half dozen enterprises that have already been picked for privatisation.
The Utility Stores Corporation (USC) is also among the 10 entities that the Ministry of Privatisation has recently shortlisted for privatisation in the next phase, according to officials.
Initially, the list comprised of 11 government-owned entities but the Cabinet Committee on SOEs struck off the name of Pakistan Television and directed to pursue the other cases, said the sources. The entities that can be privatised in the next phase included ZTBL - the only specialised bank lending money to the agriculture sector.
ZTBL is the third specialised bank that the PTI government has picked for privatisation after the Small and Medium Enterprise (SME) Bank and First Women Bank Limited (FWBL).
Prime Minister Imran Khan is keen to give a major push to the privatisation agenda in his third year in power, as the line ministries neither controlled their losses nor restructured these enterprises.
Officials said that the PM wanted the power sector losses to be stemmed at any cost, even if the government has to outsource their management to the private sector.
The government's intentions to privatise the ZTBL was clear for the last one year, as it had appointed a supra body of people who had restructured and privatised the loss making commercial banks in the past.
The supra body comprised of former finance minister Shaukat Tareen, Zubyr Soomro and Board of Investment Chairman Atif Bokhari.
The government has retained the supra body even after it finally appointed a regular ZTBL board that comprised people having rich banking background.
The ZTBL management is in the process of reducing the workforce through natural attrition, according to the officials. So far, except over 50 contractual hiring at senior positions, no recruitments have been made against 1,700 positions that fell vacant due to retirement of people, said a senior ZTBL official.
The bank was incurring losses but the quantum has significantly reduced to around Rs4 billion by end of December 2020, according to the senior official. The other entities that have been proposed for privatisation are Utility Stores Corporation, Sui Southern Gas Company Limited (SSGCL), Sui Northern Gas Pipelines Limited (SNGPL), Pakistan Tourism Development Corporation, Pakistan Expo Centres Private Limited, Pakistan Environment Planning and Architectural Consultants Private Limited, Overseas Employment Corporation Private Limited, National Investment Trust and National Engineering Services Pakistan Limited (NESPAK).
After holding meetings with the line ministries, the Ministry of Privatisation will present the list before the Cabinet Committee on Privatisation for its formal endorsement, said the officials. The privatisation secretary and the spokesperson of the privatisation ministry were not available for comments.
The officials said that this list was also presented before the last Cabinet Committee on SOEs meeting.
They said that the chairman of the committee, Dr Hafeez Shaikh, directed that the Ministry of Privatisation should coordinate with the line ministries. He also asked the ministry to further review the list of entities that can be either privatised or restricted.
During the first two years of the PTI government, the losses incurred by the government-owned entities increased two-third, which reflected poorly on the performance of the ruling party.
In October 2018, the PTI government decided to reduce the active list of privatisation from 65 to only 11 entities - almost all profitable ones. Later on, when Shaikh joined the cabinet as the finance adviser, he expanded the list to 19 entities.
But so far no loss making enterprise could be privatised in the last two and a half years. The PTI government has already dropped Pakistan International Airlines (PIA) from the list. It had first dropped the Pakistan Steel Mills (PSM) from its active list of privatisation but then again included it in June 2019.
Last month, the federal cabinet approved the transaction structure of the PSM. The sources said that this month the PSM Board has also approved a resolution to incorporate new subsidiary to sell the majority stake through the subsidiary.
 

FuturePAF

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I would only hope the government can try to find as many potential investors as possible to raise the price they can get for the sale of these assets; preferably to Pakistanis, live in Pakistan or overseas. I also hope the laws will protect investors that go into these ventures, so that more investors can be attracted for future ventures.
 

TheSnakeEatingMarkhur

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PTI govt plans to sell 10 more entities
Privatisation list includes ZTBL, USC and two gas utility companies


Shahbaz RanaJanuary 23, 2021

prime minister imran khan photo radio pakistan

Prime Minister Imran Khan. PHOTO: RADIO PAKISTAN
ISLAMABAD:
The Pakistan Tehreek-e-Insaf (PTI) government is considering privatising 10 more entities including Zarai Taraqiati Bank Limited (ZTBL) and two gas utility companies amid slow progress on one and a half dozen enterprises that have already been picked for privatisation.
The Utility Stores Corporation (USC) is also among the 10 entities that the Ministry of Privatisation has recently shortlisted for privatisation in the next phase, according to officials.
Initially, the list comprised of 11 government-owned entities but the Cabinet Committee on SOEs struck off the name of Pakistan Television and directed to pursue the other cases, said the sources. The entities that can be privatised in the next phase included ZTBL - the only specialised bank lending money to the agriculture sector.
ZTBL is the third specialised bank that the PTI government has picked for privatisation after the Small and Medium Enterprise (SME) Bank and First Women Bank Limited (FWBL).
Prime Minister Imran Khan is keen to give a major push to the privatisation agenda in his third year in power, as the line ministries neither controlled their losses nor restructured these enterprises.
Officials said that the PM wanted the power sector losses to be stemmed at any cost, even if the government has to outsource their management to the private sector.
The government's intentions to privatise the ZTBL was clear for the last one year, as it had appointed a supra body of people who had restructured and privatised the loss making commercial banks in the past.
The supra body comprised of former finance minister Shaukat Tareen, Zubyr Soomro and Board of Investment Chairman Atif Bokhari.
The government has retained the supra body even after it finally appointed a regular ZTBL board that comprised people having rich banking background.
The ZTBL management is in the process of reducing the workforce through natural attrition, according to the officials. So far, except over 50 contractual hiring at senior positions, no recruitments have been made against 1,700 positions that fell vacant due to retirement of people, said a senior ZTBL official.
The bank was incurring losses but the quantum has significantly reduced to around Rs4 billion by end of December 2020, according to the senior official. The other entities that have been proposed for privatisation are Utility Stores Corporation, Sui Southern Gas Company Limited (SSGCL), Sui Northern Gas Pipelines Limited (SNGPL), Pakistan Tourism Development Corporation, Pakistan Expo Centres Private Limited, Pakistan Environment Planning and Architectural Consultants Private Limited, Overseas Employment Corporation Private Limited, National Investment Trust and National Engineering Services Pakistan Limited (NESPAK).
After holding meetings with the line ministries, the Ministry of Privatisation will present the list before the Cabinet Committee on Privatisation for its formal endorsement, said the officials. The privatisation secretary and the spokesperson of the privatisation ministry were not available for comments.
The officials said that this list was also presented before the last Cabinet Committee on SOEs meeting.
They said that the chairman of the committee, Dr Hafeez Shaikh, directed that the Ministry of Privatisation should coordinate with the line ministries. He also asked the ministry to further review the list of entities that can be either privatised or restricted.
During the first two years of the PTI government, the losses incurred by the government-owned entities increased two-third, which reflected poorly on the performance of the ruling party.
In October 2018, the PTI government decided to reduce the active list of privatisation from 65 to only 11 entities - almost all profitable ones. Later on, when Shaikh joined the cabinet as the finance adviser, he expanded the list to 19 entities.
But so far no loss making enterprise could be privatised in the last two and a half years. The PTI government has already dropped Pakistan International Airlines (PIA) from the list. It had first dropped the Pakistan Steel Mills (PSM) from its active list of privatisation but then again included it in June 2019.
Last month, the federal cabinet approved the transaction structure of the PSM. The sources said that this month the PSM Board has also approved a resolution to incorporate new subsidiary to sell the majority stake through the subsidiary.
Privatization and Industrialisation... circle goes on 🤦‍♂️.. why cant they sell a part of it and keep a part of it so revenue keeps coming.. like sell between 40% to 60%..
 

jupiter2007

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Selling the utility stores is utter stupidity. It can be utilised against the food mafia if properly used.
I agree. What if the same mafia bought these. I would recommend selling 55% and work with private party to bring positive changes.
 

ziaulislam

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Selling the utility stores is utter stupidity. It can be utilised against the food mafia if properly used.
Unless u realize that maryum nawaz and PPPP will be back
Better sell everything so we can make them full of poltical people who live karachi but "work" in hyderabad
FYI
Utility store was in huge losses before 2018
I have never seen a shop in pakistan in loss aprt from utility store
Now its in profit
 

Flash_Ninja

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Privatization and Industrialisation... circle goes on 🤦‍♂️.. why cant they sell a part of it and keep a part of it so revenue keeps coming.. like sell between 40% to 60%..
Thats usually what happens anyway, the govt just gives majority control over to some private entity while still keeping a large enough stake for influence.

Some other places like PSM or PIA for example are in such bad shape that even putting it under private management is not enough and it would be better off just selling it off and starting again.
 

Falcon26

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Sell everything. Walk away from this idea that the government should be running businesses that can be effectively run by the private sector.

Almost every entity run by the government is in loss and dysfunctional. From cellphone providers, electricity, aviation etc. more than $10-billion wasted each year on defunct entities that haven’t turned profit for more than 3-decades.

The definition of insanity is doing the same thing over and over again and expecting a different result.
 

ARMalik

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And the circus continues on. It was corrupt nawazoo and Zardai first, and now IK.
 

jupiter2007

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Sell everything. Walk away from this idea that the government should be running businesses that can be effectively run by the private sector.

Almost every entity run by the government is in loss and dysfunctional. From cellphone providers, electricity, aviation etc. more than $10-billion wasted each year on defunct entities that haven’t turned profit for more than 3-decades.

The definition of insanity is doing the same thing over and over again and expecting a different result.
Almost every entity run by the government is in loss and dysfunctional because of lazy, careless incompetent people are running it.

Government should Only keep 20% to 40% share, rest should go to private sector and let them make the decisions and do the hiring.
 

Falcon26

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Almost every entity run by the government is in loss and dysfunctional because of lazy, careless incompetent people are running it.

Government should Only keep 20% to 40% share, rest should go to private sector and let them make the decisions and do the hiring.
That’s why they should sell 100%. Even if someone doesn’t want to buy them, I think a case can be made why government should simply close shop and walk away.
 

Samlee

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Even If We Give PIA And Steel Mill Free It Is Worth While.Getting Hundreds of Billions of Rupees Off The STate Balance Sheet and Savings From Not Having To Subsidize Them Is Worth It
 

jupiter2007

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That’s why they should sell 100%. Even if someone doesn’t want to buy them, I think a case can be made why government should simply close shop and walk away.
That would be the best idea but who would buy them?
If I am running a business with $100,000 monthly overhead but only making $60,000 monthly, with 40% loss. Would you buy my business?
 

Falcon26

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Even If We Give PIA And Steel Mill Free It Is Worth While.Getting Hundreds of Billions of Rupees Off The STate Balance Sheet and Savings From Not Having To Subsidize Them Is Worth It
Between PIA, Pakistan Railways and Pakistan Steel Mills, its $10-billion a year that the state spends to keep these defunct organizations exist. This is more than the defense budget, and almost twice the IMF bailout. Not including the dozen other state owned enterprises. Every government that comes to power promises they will reform and privatize. But because of the entrenched mafia, nothing ever gets done. Not even by anti status quo party like the PTI. This is the truth tragedy of Pakistan.

Imagine how different Pakistan would be if it spent $10-billion each year for the past decade on education, research and human development. Instead, the money is going to entities like PSM that haven’t even been in operation for years.

Pakistan isn’t a poor country. It’s just mismanaged to the point of existential ruin. Even when everyone agrees the status quo is unsustainable.
 

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