Sale Sale Sale !!

[Leader]

Govt to sell state-owned companies, including PSO and Pakistan Steel Mills

The government is working on preparing a list of public sector companies for sale to reduce the government’s footprint in the public sector, says Muhammad Zubair, chairman of the Board of Investment (BOI).

“It is not the government’s job to do business”, said Zubair on Wednesday, in his first interaction with journalists since becoming the BOI chairman. He did say, however, that the government will change some companies’ boards of directors to improve performance.
He said work is underway to separate those companies that will be privatized from those the government will restructure to make more profitable. Zubair said they hoped to complete the evaluation process within a month.

Though the list has not yet been finalized, Zubair has already confirmed that power generation and distribution companies, Pakistan Steel Mills and Pakistan State Oil will be privatized.
According to Zubair a committee will be formed to reduce the size of the government. In the power sector alone, as many as 19 state owned companies are operating at both provincial and federal levels. “The size of the government is too strong and too heavy”, said Zubair.
The privatisation of state-owned companies is one of the conditions imposed by the International Monetary Fund’s $5.3 billion to $7.3 billion bailout package. According to various estimates, Pakistan is losing between Rs400 billion and Rs500 billion due to losses incurred by state owned companies.
The inefficiency of state owned companies, however, is only one reason for the loss of money. According to Zubair, the previous government’s credibility scared investors away, who became unwilling to invest in Pakistan. This resulted in the investment to GDP ratio dropping from 23% of GDP in 2007 to below 13% of GDP in 2012. The massive drop in investment in the last five years led to a loss of $20 billion.
That is why the government is not only trying to privatise state owned companies, but also jumpstart previously stalled investments, and attract new investments. One example Zubair pointed out is the Yamaha Company delegation that has been in Islamabad for the last two months to sign an agreement for a $150 million production plant.

Zubair said bringing in new investment was one of the top priorities of the PML-N government. He said for the current fiscal year the investment target was set at $2.5 billion, up from last year’s total investment of $1.4 billion. Zubair said most of the $2.5 billion investment will be in the power sector.


Govt to sell state-owned companies, including PSO and Pakistan Steel Mills – The Express Tribune

Yes, its not govt's job to do business, govt requires revenue though...

make them corporations instead of selling them to your friends !!

 

[Jango]

Mansha ko to nhn bech rahay???

 

[Leader]

Mansha ko to nhn bech rahay???

international friends maybe..

 

[Jazzbot]

Great going indeed, great going.. And pancha is going to get his share ofcource..

 

[Leader]

Great going indeed, great going.. And pancha is going to get his share ofcource..

its all part of loan deal with IMF to sell national revenue assets.

 

[SHAMK9]

Mansha ko to nhn bech rahay???

Heard he is buying shares of PIA.

 

[niaz]

Nationalized companies eat up tax payers money which could be better spent elsewhere. No one cares about productivity in nationalized companies because the theft is from no ones’ pocket but from the national exchequer.

Steel Mill should have been privatized long ago. But it was stopped by idiots who claimed that GOP was selling national asset very cheap. Instead of GOP getting richer by $500-million (about 50- arab rupees) Steel Mill has eaten up more than 500- arab rupees ($5-billion) in the last 10 years and can’t even pay employees’ salaries and electricity bills unless it receives more money from the gov’t. This is not a national asset, this is a "National Liability". PIA’s case is no different.

On the other hand private enterprise exists to make profit. The profit is earned thru improved productivity and optimum use of resources. Here entrepreneur gets rich but not at the expense of the national budget.

Don’t know why people are allergic to privatization. Is it because they are envious of people like Mansha or Malik Riaz getting even richer?

Malik Riaz has Bahria towns & Mansha has Muslim Commercial Bank both productive entities. What has PIA & Steel Mill to show for? How long would you want to keep pumping money down the black hole?

As long as assets stay in the country and Gov’t gets money to boot, where is the harm?

 

[SBD-3]

Perhaps because Mansha has made it to Forbes while they haven't been able to make it to dean's list.

 

[F-16 Viper]

Does it will have a bad impact on Pakistan's economy??

 

[Thorough Pro]

Sell it to international bidders, they will bring in foreign exchange, technical expertise and make these industries productive and profitable, they will also fire a lot of lazy ***** doing nothing but collecting salaries.

 

[AZADPAKISTAN2009]

Imran Khan ke ane se pahle hi mulk bech ker bhag jaiyen ge

 

[niaz]

Imran Khan ke ane se pahle hi mulk bech ker bhag jaiyen ge

Hon Sir, I deeply regret to differ from your opinion.

You cannot run even a small shop if your expenses are continuously more than your income. Your choice is either to close down the shop; as Greeks did with Olympic Airways.

Or borrow money from the bank and hope that one day it will be profitable, however if you don’t succeed, you will be bankrupt and shop will close down anyway.

Or you sell it to someone else (if you can find a buyer) who can run it better than you do. In such case there is a possibility that shop will continue albeit under another name.

Finally, you can continue pumping money from other sources in the shop to keep it afloat but your other businesses suffer as a result.

In the case of PIA & Steel Mill, GOP has been following the last option for the last 10 – 15 years. One of the consequences is that to balance the books, GOP has to borrow from IMF and also print money which causes inflation and increases the national debt.

Despite the above you call privatization as “Mulk betchna”.

There is no different between selling the ‘country as you put it’ and borrowing from foreigners such as IMF/World Bank and making future generations of Pakistanis in debt before their birth? Why not be sensible and privatize?

 

[khanboy007]

Pakistan Steel Mills and Pakistan State Oil deserved that long ago....the height of corruption in the metals and petroleum industry is immense due to huge sums of payments and transactions so a private firm would surely keep a good eye on its employees

next up should be
1. railways
2. PIA

 

[niaz]

An article on how much of tax payer's money State Owned Enterprises are managing to eat up in Pakistan.

I humbly ask all those who consider these 'Black holes' as national assets, how much more would you like to throw down the drain before you agree to privatize these white elephants.


Opinion
Rupees one trillion


Dr Farrukh Saleem
Sunday, July 21, 2013
From Print Edition

Rupees one trillion

Capital suggestion

Two hundred state-owned enterprises (SOEs) manage to lose an amount equivalent to 2.5 percent of our GDP. That’s a wholesome Rs500 billion a year, every year. The same 200 SOEs take on additional loans in the name of the Islamic Republic of Pakistan, an amount equivalent to 2.5 percent of our GDP. That’s an additional Rs500 billion a year, every year. The two add up to Rs1,000,000,000,000 a year, every year.

Well, Rs1 trillion is $10 billion. Imagine, all that our IMF begging bowl got us is $5.3 billion over a 36-month period and that too has to be paid back with interest.

So where do we begin? We certainly don’t need to invent the wheel all over again because there are ‘OECD Guidelines on Corporate Governance of State-Owned Enterprises’ and then there is the ‘OECD Global Network on Privatisation and Corporate Governance of State-Owned Enterprises’. All we need to do is balance the wheel to run on our roads.

Rule number one under the ‘OECD Guidelines on Corporate Governance of State-owned Enterprises’ is: Ensure an effective legal framework. The good news is that our very own Public Sector Companies (Corporate Governance) Rules, 2013 went into effect on July 8, 2013. This indeed is a fine piece of legislation.

Rule number two under the ‘OECD Guidelines on Corporate Governance of State-owned Enterprises’ is: Ensure an effective regulatory framework. The good news here is that we have all the physical infrastructure in the form of the SECP, the SBP, the PTA, Pemra, Nepra, the CCP, Ogra, the CAA and the DRA. The bad news is that these regulators have neither individual nor organisational capacity. They are bodies without souls.

Rule number three is: The state must act as a responsible owner. The three benchmarks under this rule are professionalism, transparency and accountability. The state must let the boards “boards exercise their responsibilities and respect their independence”. And the state “should not be involved in the day-to-day management of SOEs and allow them full operational autonomy to achieve their defined objectives”. Under rule number three, there is no good news to report. Plain and simple, the state of Pakistan acts as the most irresponsible of owners.

Rule number four is: The boards “should be assigned a clear mandate and ultimate responsibility for the company’s performance”. The three benchmarks here are competence, objectivity and the necessary authority. Under rule number four, there is no good news to report. What we have is a dictatorial model. What we have is centralisation, perhaps over-centralisation. What we have is an economic dictator in the form of the prime minister or a minister. The boards have neither a clear mandate nor any responsibility for the company’s performance.

The cost of this economic dictatorship stands at Rs1 trillion a year. The beneficiaries of the loot want the dictatorship to continue. On July 17, the federal government, as a consequence of a Supreme Court order, established a three-member commission to select CEOs of SOEs. Lo and behold, we have miraculously replaced one dictatorial model with another. Who said that in a “bureaucratic system useless work drives out useful work?”

Anyone really interested in breaking the begging bowl? Anyone really interested in saving Pakistan Rs1,000,000,000,000?

The writer is a columnist based in Islamabad. Email: farrukh15@hotmail.com. Twitter: @Saleemfarrukh

Rupees one trillion - Dr Farrukh Saleem

 

[niaz]

duplicate post