The ‘pro-business’ PML-N government is working on a plan to privatise at least 65 Public Sector Enterprises (PSEs) in line with its assurances to the International Monetary Fund (IMF) on the long-term structural reforms. The labour unions, who also hold a certain percentage of stakes in the public sector loss-making entities like the Pakistan International Airline (PIA), tend to resist the government’s privatisation plans tooth and nail.
In the Letter of Intent (LoI) titled “Memorandum on Economic and Financial Policies” Islamabad submitted to the IMF for the ultimate receipt of a fresh bail-out package of $6.64 billion, the Government of Pakistan told the international lender that it would sell some 65 PSEs off.
Of the number, at least 35 would be made subject to a block sale or secondary public offerings (SPOs) by the end of this month, the LoI said. “The privatisation of Pakistan International Airline, Pakistan Steel Mill (PSM) and Pakistan Railways would be of prime importance,” said the analysts at Topline Research.
The government would be stripping non-viable operations and departments of PIA under another PSE like PIA2. After that, 26 percent shares of the Airline would be offered to strategic investors in privatisation by the end of June 2014. As for the PSM, the Mill’s restructuring plan would be approved by end-September for which the government has already appointed a professional board. “We believe that the successful reforms would not only result into reduced fiscal deficit, it may also bring foreign investors and foreign exchange into Pakistan,” the analysts viewed. Given the fact that the government was stuck up with the issue of terrorism and politically-motivated violence in the country, the privatisation plans look optimistic, they said. Divesting from the targeted enterprises, however, has never been an easy going for the democratically-elected governments. “Improving the bad performance of PSEs and their privatisation would be a real test ground for the government,” said the analysts. Hidayatullah Khan, president of PIA’s Collective Bargaining Agent, vowed a strong resistance if the government went for the Airline’s sell-off. “The intentions show that they would go for the privatisation that we would resist tooth and nail,” Khan told Pakistan Today.
The unionist said it was the wrong policies of PML-N’s Shahid Khaqan Abbasi that made the PIA insolvent and not the employees. “We with 12 percent shareholding are the owners and not employees of PIA,” said Khan, a PPP supporter.
He said ill-thought-out past policies like Open Sky and the introduction of a faulty cyber system has inflicted huge losses upon the national flag-career. Asked as what had made the PIA a white elephant, the CBA chief said anything but the employees. “The salaries of employees constitute only 16pc of total PIA’s income. 84pc is consumed by the fuel and the rest by the management’s lavish spending,” he claimed. Also, last week the employees of Pakistan Railways took to the street to protest the government’s intentions to privatise Railways.
The Railways unions took a rally from the City Railways Station to Shaheen Complex on I.I Chundrigar Road. The marchers holding placards, banners and flags shouted slogans against the government and proposed sell-off of the PR. They claimed that talks of privatisation were aimed at depriving the Railways employees of their livelihood.
