When the government takes up the privatisation agenda, one has to wonder if it’s being done to generate one-off revenue or save itself from years of bleeding money. Consultants, expressions of interest, letters of intent, back-and-forth negotiations, restructuring, rumours, and finally, some progress is made.
The case for PIA is clear. It cannot stay in the airline business the manner in which it tries to run the sector as well as the entity. The government just does not have the skill or will to compete and run an airline that has so many legacy issues that turning it around will require nothing less than a miracle.
In the case of banks, it just made sense for the private sector to come along and introduce innovation. It’s another matter that the banking sector still has the government as its biggest client. That’s a story for another day.
But what about the case of the power sector? What about those DISCOs that are being put up for privatisation? There is a sole example of an entity being privatised in the power sector. If it is to be used as an example to see what the intention behind privatisation is, one has to move ahead with caution.
The argument isn’t anti-privatisation. The argument is on the intended outcomes. If entities are to be privatised and moved to the private sector with commercial intentions, then they have to be treated that way. Regulating them is fine. But suffocation is another matter.
There is hardly any news on LESCO and MEPCO’s performances. DISCOs are clubbed together. Even when the going gets tough, these entities do get away with it because the entire government machinery sits together and comes up with an explanation. Minister for Energy Awais Leghari gave a clear-cut answer on the overbilling process, pinning it on the previous government.
This is precisely the point. Right now, DISCOs get away with it. When they are privatised, answers will be demanded and by the very same people who are currently offering explanations. That is when the real strength and performance of these entities will come into play.
Remember, the privatisation agenda of any government needs to be clear. They do it to either make money or reduce government control. But in Pakistan, it makes us feel that privatisation is done to make and/or find scapegoats for a structure it builds, and failures it designs.
PIA’s privatisation in a sector where airline galore exists and competition has gotten so far ahead that it is almost impossible to move without out-of-the-box thinking.
The unfortunate case is that governments tend to get away with finding scapegoats. The IMF is another favourite one.
Taxing the public is always pinned on IMF conditionalities. Years of over-expenditure and lack of control on fiscal matters is never investigated. There is a simple ask: pursue whatever privatisation agenda you want. Do it for the right reasons. Do not do it to shift your blame or responsibility to private investors who have trusted you.
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