Daily Times

Factors contributing to the failed government model in our part of the world include the Pakistani government’s tendency to run everything from airlines to grocery stores. Ideally, a government’s role should be to create an atmosphere conducive to business growth. The case of collapsing utility stores serves as a textbook example.

Then we have Punjab’s Model Bazaars, which represent a different situation. In 2015, these bazaars were on the brink of financial collapse, generating only PKR 38 million annually without a structured revenue collection system. Initially conceived as a public welfare initiative to provide essential goods at affordable prices, they were instead becoming a financial burden, often referred to as a “white elephant.” Recognizing the urgent need for restructuring, the Punjab government made a bold decision in 2016 to establish the Punjab Model Bazaars Management Company (PMBMC), incorporating it under the Securities and Exchange Commission of Pakistan.

PMBMC Chief Executive Officer Naveed Rafaqat Ahmad, chartered accountant and certified director, has seen the company transformation from a white elephant to a cash cow. With over 15 years of experience in financial restructuring and corporate governance, he undertook a few fundamental changes, and the PMBMC is a success story.

At the time of PMBMC’s incorporation, there were 20 Model Bazaars across Punjab, but they were on the brink of closure due to poor policies, mismanagement, and no structured rent collection. However, Naveed Rafaqat, being certified business analyst with qualifications from the UK, made these markets profit generating in just one year.

Model Bazaars are a source of livelihood for approximately 60,000 families, creating both direct and indirect employment opportunities.

The success of PMBMC can be attributed to a series of transformative reforms. A structured stall allotment system and effective rent collection mechanisms were implemented, establishing a strong foundation for financial stability. By leasing land for additional revenue-generating activities and enabling small business owners to set up stalls with minimal investment, PMBMC effectively changed its trajectory. These initiatives not only created both direct and indirect employment opportunities but also made the Model Bazaars self-sustaining, significantly decreasing their dependence on government funding.

The revenue growth illustrates this success, with figures rising dramatically from Rs 38.831 million in 2015-16 to Rs 1,545.867 million in 2023-24. Furthermore, the net surplus has improved significantly, reaching PKR 14.628 million in 2023-24 compared to a deficit of Rs 14.31 million in 2015-16. This remarkable turnaround underscores the effectiveness of PMBMC’s strategic reforms.

PMBMC introduced “Day Bazaars” to foster local entrepreneurship by providing a platform for vendors to showcase handmade crafts and specialty items. This initiative, alongside policies offering discounts to widows, women, and people with disabilities, increased customer engagement and footfall. Today, these bazaars attract 60 million visitors annually, providing small businesses with opportunities to thrive while offering the public access to affordable goods.

PMBMC’s financial turnaround is evident from its income and expenditure reports. The company’s revenue saw an extraordinary increase, rising from Rs 38.8 million in the fiscal year 2015-16 to Rs 1,545.8 million in 2023-24. Over the years, PMBMC consistently achieved a net surplus, with the highest recorded surplus of Rs 14.628 million in 2023-24.

Furthermore, the company significantly enhanced its asset base, with net assets increasing to PKR 167.5 million. In summary, for the year 2023-24, PMBMC reported revenue of Rs 1,545.867 million and total expenses of Rs 1,531.239 million, resulting in a net surplus of Rs 14.628 million and net assets amounting to Rs 167.526 million. These figures reflect the successful financial management and operational achievements of PMBMC.

The COVID-19 pandemic severely impacted global markets, yet PMBMC emerged stronger. Through meticulous planning and government support, PMBMC expanded from 20 to 36 bazaars across Punjab during the crisis. The organization not only maintained operations but also received additional state land to establish new bazaars. PMBMC’s ability to expand during such challenging times underscores its robust operational framework and forward-thinking strategies.

A key PMBMC initiative, the Sahulat Stalls, revolutionized the supply chain by bringing fresh produce directly from farmers to consumers, eliminating middlemen and reducing costs. This model has proven to be immensely successful, providing high-quality fruits, vegetables, and essential items at prices lower than government-notified rates. The Sahulat Stalls, now operational throughout Punjab, reflect PMBMC’s commitment to public welfare.

This initiative ensures affordability and strengthens the supply chain by sourcing directly from farmers and eliminating intermediaries. The Sahulat Stall program continues to deliver substantial economic relief to the public, reinforcing its status as a flagship initiative within PMBMC’s broader strategy of social welfare and economic empowerment.

In addition to the Sahulat Stalls, PMBMC also introduced affordable leisure activities in its bazaars. Families can now enjoy Joyland rides for just Rs 10 – much lower than the standard Rs 75 charged elsewhere – making Model Bazaars more than just marketplaces but vibrant community spaces.

Beyond being a source of affordable groceries, Model Bazaars serve as a mini-emporium for middle and lower-middle-class families. They provide a well-rounded shopping experience with affordable groceries, fresh produce, household items, and leisure activities such as Joyland, all in a single location. This creates a unique and family-friendly environment, making Model Bazaars more than just a marketplace but a social hub where people can shop, relax, and enjoy their time with their families.

Additionally, Model Bazaars are a source of livelihood for approximately 60,000 families, creating both direct and indirect employment opportunities. This includes over 20,000 stalls and 16,000 outlets, each contributing to the overall economic activity in the region. The bazaars also support Small and Medium Enterprises (SMEs) by providing affordable, secure spaces with facilities like free electricity, security, cleanliness, and infrastructure-allowing entrepreneurs to start or grow their businesses with minimal upfront investment. This makes Model Bazaars a fertile ground for nurturing small businesses, further contributing to economic diversification and local development.

The writer is a freelance columnist.