A meeting took place between the Federal Minister for Privatisation, Fawad Hasan Fawad, and Najy Benhassine, the Country Head of the World Bank in Islamabad today.
Both sides discussed different agenda items, with a particular focus on the privatization of Pakistan International Airlines (PIA) and optimizing the performance of Distribution Companies (DISCOs).
This concerted effort aims to rectify substantial financial losses incurred by these entities and thereby alleviate the fiscal burden on the government.
The Minister said that the Federal government including the Apex committee of SIFC, comprising civil bureaucracy, military leadership, and political stakeholders, has unanimously agreed to undertake the privatization of major loss-making State-Owned Enterprises (SOEs) which are already on the privatization list.
These SOEs are responsible for a substantial financial drain on government resources.
PIA has emerged as the foremost priority for privatization due to its persistent and staggering financial losses, amounting to billions of rupees annually.
Privatizing PIA is considered imperative to remove these losses and improve its operational efficiency.
Minister Fawad Hasan Fawad explained the outlines of the PIA privatization plan, expressing the government’s intention to engage the World Bank and other financial institutions in the initial phases of this effort.
The overarching objective is to attract much-needed private investment through the Privatisation process, thereby unlocking government funds for deployment in vital infrastructure development and other strategic sectors.
Furthermore, the Minister highlighted the intention to develop a comprehensive model for PIA, with the World Bank remaining a key partner for potential future support.
Federal Minister also discussed Distribution Companies (DISCOs) given their substantial annual losses, which currently stand at a staggering $2.5 billion. Two productive sessions with the International Finance Corporation (IFC) have already occurred, focusing on formulating a long-term concession model to mitigate these losses.
Ongoing discussions with the IFC are expected to yield a concrete strategy for private sector participation in the DISCOs, with a prime objective of privatizing to achieve loss reduction and performance enhancement. The meeting encompassed a broader range of support areas, encompassing advisory and legal assistance. These aspects are considered crucial in ensuring the successful execution of the Privatisation process.
The meeting between the Federal Minister for Privatisation, Fawad Hasan Fawad, and the World Bank Country Head, Najy Benhassine, ended with a positive resolve of mutual cooperation in addressing the pressing financial challenges posed by PIA and DISCOs.
This dialogue demonstrates the government’s unwavering dedication to confronting the financial hurdles posed by underperforming SOEs. The government actively seeks the World Bank’s support and collaboration throughout this critical process.
Privatising all the white elephants sooner than later would be a big favour to Pakistan
Privatisation of DESCO is an easy way for self destruction. The point is that have we as a nation failed to analyse our problems and set them right. There is no harm to be too strict to set DISCOS right. Please hold discussion on national level to decide the issue. Have really gained by privatization of K Electric?
Privatisation is the only solution for these state owned entities..