Daily Times

How many times in the past was the PIA placed at the verge of privatisation but it survived? And how many times PIA’s competitor in loss-making, the Pakistan Steel Mills (PSM), was put up for privatisation but it also survived? Even the International Monetary Fund (IMF) in February this year demanded the government to privatise the PSM. Why various governments in the past have been embracing loss-making organisations at the cost of taxpayers’ money needs an answer.

Although there’s no dearth of loss-makers in the list of public sector organisations, every government treated PIA as a sacred cow because of vested interest of the mighty and powerful in the country. For example, according to PIA management, the airline’s monthly sales amount to Rs 22 billion but its expenditure for the same period stands at Rs35 billion. Thus the loss amounts to Rs13 billion a month.

In 2018 when Imran Niazi became the PM, PIA was already a candidate for privatisation. But the PTI government, with all its wisdom, decided to cancel the privatisation plans of the airline. A senior retired Air Force officer took over as the chief executive of the PIA to make it profitable. This was nothing new; such tactics had been tried many times before but the airline’s losses couldn’t turn into profits. Presently, the airline has 34 planes but only 19 take to the sky and 15 are grounded. What a performance!

Every government treated PIA as a sacred cow because of vested interest of the mighty and powerful.

Then the PIA owns the Roosevelt hotel in the heart of New York. The airline failed to run it profitably as it failed to run its own operations. The hotel was handed over to New York City Administration on a contract for three years. According to the contract, the NYC administration would pay Pakistan $220 million for operating the hotel for a period of three years. Khawja Saad Rafique, then federal minister for Railways and Aviation after signing the contract said the government had been saved from the liabilities of ‘479 employees under the new agreement. Only 79 employees would work and 402 employees were laid off’. Why were so many employees hired in the first place also needs to be explained. Over-staffing is one of the main reasons for the public sector organisations to incur losses and turn unprofitable.

Moreover, some power plants and many discos have been earmarked for privatisation. When the discos emerged on the scene, people thought the problem of supply of electric power to their homes, offices and factories had been resolved. But not so. Other than naming the discos after the names of big cities, Lesco for Lahore, Fesco for Faisalabad and Pesco for Peshawar etc. no change in the performance occurred. These companies, however, were overloaded with staff headed by a Chief Executive Officer. Every CEO pocketed a few hundred thousands in salary every month. Nobody remembers Wapda anymore; discos have taken its place. When performance of discos is as dismal as Wapda’s, what’s in a name, the consumers question. But the Minister for Privatisation has said the discos will not be privatised as yet. A different strategy would be evolved in their case. Perhaps discos have some trappings attached, which may not be in public interest to know.

However, when the privatisation minister recently called the PSM a ‘dead asset’, it didn’t surprise anyone. Pakistan Steel Mills has been out of production since 2015 but its employees were paid their salaries anyway, much to the consternation of the taxpayers. In 2006, the government at the time wanted to privatise the Pakistan Steel Mills, but chief justice Iftikhar Chadhry struck down its privatisation through a judgement. His decision cost the nation heavily but no skin off Chaudhry’s nose. At some stage, investors from Russia and China showed interest in taking over the PSM but nothing materialised out of it due to the government’s dilly-dallying.

In fact, it’s not the job of the government to involve itself in industrial and commercial activities. Its job is to facilitate the private industrialists and entrepreneurs who know their profession and have the skill to set up and manage industries and businesses.

Why is it that the national flag-carrier is causing huge losses to the exchequer, no bank wants to extend loan to it and even PSO has refused to refuel its planes, while the Airblue and AirSial in the private sector are doing successful business.

This should clearly explain how the same line of business in the public sector fails miserably but in the private sector it flies high.

The writer is a Lahore-based columnist and can be reached at pinecity@gmail.com