ISLAMABAD: The Pakistan government said on Saturday it was struggling to resolve all pending issues to expedite the privatization of loss-making state-owned entities (SOEs), as their cumulative losses have soared into trillions of rupees, challenging the country’s ability to sustain them amid a financial crunch.
Pakistan has identified 25 public sector enterprises for privatization, including the flagship carrier Pakistan International Airlines (PIA), banks, hotels and power generation and distribution companies. However, the country’s progress in privatization has been stalled for decades due to political inertia and various challenges, including legal, licensing and ownership issues.
In a recent push for privatization, aiming to avert a macroeconomic crisis, Pakistan agreed in June 2023 to reform its loss-making SOEs as part of a deal with the International Monetary Fund (IMF) for a $3 billion bailout package.
The government resolved to privatize PIA shortly after finalizing the IMF agreement.
“The political will of a government matters in privatization of the public sector enterprises, and this time the government is keenly focusing on the privatization as the accumulative losses are in trillions of rupees now,” Dr. Ahsan Ishaq, a spokesperson for Ministry of Privatization, told Arab News.
Official data reveal there are 88 commercially operated state-owned enterprises (SOEs) in Pakistan, with their collective losses reaching Rs730.258 billion ($2.61 billion) in the fiscal year 2022.
The top ten loss-making entities, including PIA with Rs97.5 billion, the National Highways Authority at Rs168.5 billion and the Peshawar Electric Supply Company Limited with Rs102.2 billion, accounted for a cumulative loss of Rs650.197 billion ($2.33 billion).
In contrast, the remaining enterprises reported combined losses of Rs80 billion ($286 million) in the same fiscal year.
Dr. Ishaq disclosed that PIA’s cumulative losses alone have surpassed Rs800 billion ($2.86 billion), with the total asset valuation of the airline standing at approximately Rs160 billion ($572 million).
“As part of the privatization, currently the work is underway on bifurcation of the PIA into two entities and once this is completed, the expression of interest will be issued,” he said, adding the Privatization Commission was currently focusing on only three entities including the PIA, First Women Bank and House Building Finance Company (HBFC).
“There are multiple legal, licensing and ownership issues of the entities on the privatization list that keep hampering the smooth transaction,” he said, adding that political and economic instability in the country were also impeding the privatization process.
“We may not get the best offers [for the entities] from potential buyers, but we can’t afford to linger on with the multibillion-dollar losses of these enterprises,” he said.
He said the privatization of the PIA, HBFC and First Women Bank was at the advanced stage, and “the successful transaction of these entities may help boost confidence of the government and investors for other enterprises as well.”
“The UAE [United Arab Emirates] government has shown interest for a G2G [Government-to-Government] transaction of the First Women Bank, and hopefully this will materialize in the coming months,” he said.
Economists said it was heartening that almost all stakeholders were on the same page after decades of foot dragging over the privatization of loss-making entities, though they warned there was still a long way to go.
“It is yet to be seen as to what concessions the government would offer to buyers especially in regulations of the energy companies to make them attractive for privatization,” Ali Khizar, a senior economist, said in a conversation with Arab News.
He said successive governments had been striving to privatize the loss-making enterprises since 1992, but the process was stalled either by the local courts or opposition parties.
“The government should work on the economic and political stability to fetch good offers from buyers,” he suggested, pointing out that next IMF program could also be crucial in terms of privatization of Pakistan’s public sector enterprises.
“If we get a push from the IMF in the next program, the process of privatization could be expedited to reduce the losses,” he said.
Federal Minister for Finance and Revenues Muhammad Aurangzeb said on Tuesday Pakistan would seek a “large and long program” from the IMF under the Extended Fund Facility to overcome the macroeconomic challenges.
Ahsan Mehanti, managing-director and CEO of Arif Habib Commodities, said the need of the hour was effective decision-making to either improve management of the ailing SOEs or offload them to get rid of the enormous losses.
“This government’s privatization resolve is a silver lining, but timely and effective decisions are required to proceed with the process,” he told Arab News. “This is the best time to invite bids and get the loss-making enterprises offloaded as we can’t continue like this anymore.”
Pakistan struggles to privatize state-owned entities as losses mount to trillions of rupees
https://arab.news/busm3
Pakistan struggles to privatize state-owned entities as losses mount to trillions of rupees
- The government says it may not get the best offers, but it can’t afford to incur billions of dollars in losses
- Experts say government’s timely decisions to offload the loss-making entities can stabilize the economy
Pakistan’s Punjab to develop ‘advanced air quality management system’ with Chinese help
- Beijing-Punjab Clean Air joint working group set up during chief minister’s ongoing visit to China
- Nearly two million people in Pakistan fell ill when smog choked Punjab for over two weeks last month
ISLAMABAD: Pakistan’s most populous province of Punjab will develop an advanced air quality management system with the help of China to combat an enduring smog and pollution crisis, a statement from the provincial chief minister’s office said on Wednesday.
Smog had choked Pakistan’s eastern Punjab province for weeks last month, sickening nearly two million people and shrouding vast swathes of the province in a toxic haze.
On Wednesday, Lahore, the capital of Punjab, was listed as the world’s sixth most polluted city by Swiss air monitor IQAir, and its PM2.5 concentration, which comprises air particles that damage lungs, was 20.5 times the World Health Organization annual guideline value. The province had closed down schools and offices for days last month, banned outdoor activities and shortened timings for restaurants, shops and markets in a bid to control smog.
“Agreement reached to develop an advanced air quality management system in Punjab with China’s collaboration,” the ruling PML-N party in Punjab said in an X post after Sharif met Chinese environment authorities. “Decision to establish the ‘Beijing-Punjab Clean Air Joint Working Group’ has been made.”
The officials also discussed wildlife conservation and plantation projects, with Sharif saying Punjab would leverage China’s expertise and experience in implementing an e-transport system in the province.
China has taken significant steps to combat its worsening air quality, declaring a “war on pollution” in 2015. Key measures include reducing coal consumption, increasing renewable energy capacity, and improving air quality monitoring systems.
However, researchers said last month China’s emissions of carbon dioxide were on course to rise slightly this year, despite rapid progress on renewables and electric vehicles, putting a key 2025 climate target further out of reach.
China wants to cut the amount of CO2 it produces per unit of economic growth by 18 percent over the 2021-2025 period, but it fell further behind this year as a result of rising energy demand, said the Helsinki-based Center for Research on Energy and Clean Air (CREA) in its annual assessment.
Pakistan announces joint body on transit trade with Tajikistan amid Central Asia investment push
- Pakistan wants to consolidate its role as a pivotal trade and transit hub for landlocked Central Asian republics
- Tajikistan is Pakistan’s closest neighbor in Central Asia with narrow strip through Wakhan corridor separating them
ISLAMABAD: Power Minister Sardar Awais Leghari on Wednesday announced that Islamabad and Dushanbe had agreed to set up a joint coordination committee to address transit trade challenges, as Pakistan pushes to consolidate its role as a pivotal trade and transit hub connecting the landlocked Central Asian states with the rest of the world.
In recent weeks, there has been a flurry of visits, investment talks and economic activity between officials from Pakistan and the Central Asian nations. Tajikistan is Pakistan’s closest neighbor in Central Asia with a narrow strip of 14km through the Wakhan corridor separating the two countries.
On Wednesday, speaking at the seventh session of the Pakistan-Tajikistan Joint Commission in Islamabad along with Tajikistan Energy Minister Juma Daler Shofaqir, Leghari said both nations needed to explore “new avenues of cooperation” in commercial and economic fields.
“I’m pleased to note that both sides have agreed to create a joint coordination committee on transit trade under the Tajikistan-Pakistan trade transit agreement, which will play a pivotal role in addressing operational challenges and ensuring the smooth implementation of transit trade provisions,” Leghari said.
He hoped deliberations of the joint commission would aid in preparing “concrete” recommendations to advance further growth in the fields of trade, energy, agriculture and education as well as the industrial sector.
Leghari also called for a “plan of action” to raise the current volume of trade through more trade activities and the removal of barriers. According to data published by Tajik Customs, during 2023 (Jan-Dec), the volume of bilateral trade between Pakistan and Tajikistan stood at $52.73 million, an increase of 62.3 percent in comparison with the previous year.
“I want to emphasize the significance of extending our regional connectivity and welcome Tajikistan to avail all trade corridors from Dushanbe to Gwadar and Karachi under the Central Asian Regional Economic Cooperation program and other multi-model transnational trade corridors,” Leghari added.
He said proximity between Pakistan and Tajikistan through the Wakhan corridor presented an “excellent opportunity” to establish direct connectivity.
Leghari also spoke about the significance of the $1.2 billion Central Asia-South Asia Electricity Transmission and Trade Project (CASA-1000) project, that aims to bring 1,300 megawatts of surplus electricity from Central Asia to high-demand electricity markets in South Asia. This project involves the construction of a 1,227km-long cross-border transmission line that will connect Kyrgyzstan, Tajikistan, Afghanistan, and Pakistan
“I sincerely hope that the remaining work can be expedited to fully realize the potential of this vital energy cooperation ensuring mutual benefits in the power sector,” the Pakistani minister said.
Pakistan, China hold three-week-long joint war exercise
- China is pushing to join Pakistani security efforts to protect its citizens, last month unveiled plan for joint counterterror exercises
- Warrior-VIII exercise between Pakistan Army and Peoples’ Liberation Army of China held from Nov. 19 to Dec. 11 in Pakistan
ISLAMABAD: The Pakistan army said on Wednesday it had held a joint war exercise with China from Nov. 19 to Dec. 11 amid a push for deeper security ties between Islamabad and Beijing.
Following a string of deadly attacks that targeted its citizens in recent months, China has pushed to join Pakistani security efforts to protect them, and last month unveiled a plan for joint counter-terrorism exercises in Pakistan.
The exercise, which both the sides called Warrior-VIII between the Pakistan Army and Peoples’ Liberation Army of China, was launched at a northwestern Pakistani counter-terrorism facility, a Pakistani army statement said last month, adding that the exercise was aimed at “refining professional skills through joint training, besides harnessing (our) historic military-to-military relations.”
In a statement released on Wednesday, Pakistan said the exercise concluded today, Wednesday.
“Pak-China Joint Exercise Warrior-VIII between Pakistan Army and Peoples Liberation Army of China was conducted from 19 November to 11 December 2024,” the army’s media wing said.
“Three weeks’ long Exercise in Counter Terrorism domain is 8th in the series of bilateral exercises being held annually.”
Attacks on Chinese nationals have put the bilateral relations between both states under increasing stress, with Chinese officials breaking from diplomatic norms in recent months and publicly calling on Islamabad to provide better security.
Media reports in recent weeks have also widely speculated that Beijing has said it will not continue with projects under the China-Pakistan Economic Corridor (CPEC), a $65 billion investment in President Xi Jinping’s Belt and Road infrastructure initiative, unless Pakistan can guarantee security.
Dam protesters blocking Pakistan’s Karakoram Highway give government 15 days to meet demands
- Government plans to build Diamer-Bhasha dam on River Indus between Khyber Pakhtunkhwa province and Gilgit-Baltistan
- Protesters’ demands include the resettlement of those displaced by the dam as well as financial compensation for them
KHAPLU, Gilgit-Baltistan: Demonstrators who have been blocking the Karakoram Highway linking the remote northern Gilgit-Baltistan region to the rest of Pakistan to protest the construction of a dam said on Wednesday they would allow the road to be opened for 15 days, giving the government until then to meet demands.
The government plans to build the Diamer-Bhasha dam on the River Indus between Kohistan district in Khyber Pakhtunkhwa province and Diamer district in Gilgit Baltistan by 2028-29. It is estimated that plans to build the dam and reservoir will displace more than 4,200 families in nearby areas. Once constructed, the dam will submerge a large section of the Karakoram Highway to China, Pakistan’s Water and Power Development Authority (WAPDA) estimates.
For the last two days, hundreds of protesters have been blocking the KKH in the Diamer district in protest against WAPDA, whom they say has not paid them compensation for land they gave up for the construction of the dam.
Three rounds of negotiations with the government had failed, Shahid Iqbal, a member of the protesters’ core committee, told Arab News.
“Though all negotiations with the government couldn’t reach a conclusion, we don’t want to disturb the public, that’s why we are opening the road to facilitate commuters,” Muhammad Iqbal, the leader of the protesters’ core committee, told Arab News on Wednesday via telephone from the region.
“And on assurances of the senior superintendent of police, Sher Khan, speaking on behalf of the government, we have extended the deadline for 15 days. The local administration has promised to resolve our issues after consulting with the general manager of WAPDA within 15 days.”
Iqbal said the protest would resume after 15 days if the government failed to meet demands, including the resettlement of those displaced by the dam’s construction as well as financial compensation for affectees.
Speaking to Arab News, the spokesperson of the Gilgit-Baltistan government, Faizullah Faraq, said the government would consider all “valid demands” of protesters.
“Officials from WAPDA, the district administration, and police are representing the government side, while five members of [dam] affectees are taking part in the negotiation process,” Faraq told Arab News.
He said Diamer-Bhasha dam affectees had protested multiple times in the past but their latest move to block the KKH had left “hundreds of passengers stranded on both sides.”
“They have presented their demands and the government will leave no stone unturned to fulfil their valid demands,” the official added.
The $12-$14 billion Diamer-Bhasha dam should generate 4,500 megawatts (MW) of electricity, and a vast new reservoir would regulate the flow of water to farmland that is vulnerable to increasingly erratic weather patterns. With a gross water storage capacity of 8.1-million-acre feet (MAF), the dam is expected to help irrigate 1.23 million acres of additional land.
China and Pakistan signed a memorandum of understanding in December 2016 for Beijing to help fund and develop Pakistan’s Indus Basin dams, though no timelines were released. Pakistan estimates there is 40,000 MW of hydro potential.
Pakistan has been keen for years to build a cascade of mega dams along the Indus flowing down from the Himalayas, but has struggled to raise money from international institutions amid opposition from its nuclear-armed neighbor India.
Those ambitions have been revived by China’s Belt and Road infrastructure corridor for Pakistan, a key cog in Beijing’s creation of a modern-day Silk Road network of trade routes connecting Asia with Europe and Africa.
Pakistani PM slams Imran Khan’s call for civil disobedience
- Khan has said his PTI party will lead a civil disobedience movement from Dec. 14 if political prisoners are not released
- Party also demands judicial investigations into crackdowns on supporters during protests in May 2023 and Nov. 2024
ISLAMABAD: Prime Minister Shehbaz Sharif on Tuesday denounced calls for a civil disobedience movement by jailed former premier Imran Khan, describing the move as being “antagonistic” towards the country’s interests at a time it was heading towards economic recovery.
On Dec. 5, Khan, jailed since August 2023 on charges he says are politically motivated to keep him away from power, said in a message to supporters that he was setting up a five-member negotiations committee to hold talks with the federal government for the release of political prisoners. He also demanded judicial commissions to investigate protests on May 9 last year and Nov. 24 this year in which the government says supporters of Khan's Pakistan Tehreek-e-Insaf (PTI) party partook in violence and caused vandalism. If the two demands were not met, Khan said, the party would launch a civil disobedience movement from Dec. 14.
“Economic stability is linked with political stability and vice versa but unfortunately, there is another attempt which they [PTI] call civil disobedience,” Sharif said in an address to his cabinet. “What could be more antagonistic towards Pakistan than this?”
Pressure on the PTI, at loggerheads with the government and military for months, has increased since last month, when thousands of the party’s supporters stormed Islamabad, demanding Khan’s release from prison. The government says protesters killed four security officers in clashes while the PTI says at least 12 of its supporters died and "hundreds" were injured as security agencies used live ammunition rounds to disperse protesters, which authorities deny.
PTI leaders have described last month’s raid on their protest site as a “massacre,” with social media platforms awash with pictures and video footage that the government has called “fake propaganda” by PTI followers. The government also says there were no civilian casualties. The army was deployed by the government during the raid to disperse protesters, but authorities say only police and paramilitary troops participated while the military acted as a "third line of defense."
In the aftermath of the protests, the Sharif coalition government formed two task forces: one to identify and take legal action against rioters and another to track and bring to justice suspects behind what the government describes as a “malicious campaign” to spread “concocted, baseless and inciting” online news, images and video content against the state and security forces.
In a strongly worded statement released last week, the Pakistan army also called on the government to take action against the rioters as well as those who had launched “fake” online campaigns against the state and its security agencies.
“Those who made a foul attempt to attack Islamabad and caused vandalism, I have issued a clear instruction that those who are involved in this conspiracy against Pakistan, with evidence, won’t be spared under any circumstances,” Sharif said at Tuesday’s cabinet address.
“But if someone is innocent, no one is going to touch him.”
Khan, who remains a popular figure in Pakistan despite being in prison and facing several court cases, has led a campaign of unprecedented defiance against the PM Sharif ruling coalition and the all-powerful military, which he accuses of being behind his ouster from office in 2022. The army denies it interferes in politics.
