Investigation report calls deadly 2012 Pakistani factory fire ‘planned sabotage’

A firetruck stands outside the Baldia Town textile factory where a fire killed 259 people in Karachi, Pakistan, on September 11, 2012. (AP)
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Updated 07 July 2020
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Investigation report calls deadly 2012 Pakistani factory fire ‘planned sabotage’

  • At least 259 died in a fire at a textile factory in Karachi’s industrial suburb of Baldia Town in September 2012 
  • Investigation report holds members of the MQM party responsible the fire over factory owners’ refusal to pay extortion money 

ISLAMABAD: An investigation report into a 2012 fire at a factory in Pakistan’s teeming commercial capital of Karachi called the incident “planned sabotage” over owners refusing to pay extortion money and share profits with members of a powerful political party.

Fire ravaged a cramped textile factory in Karachi’s industrial suburb of Baldia Town in September 2012, killing 259 workers trapped behind locked doors. Officials called it Pakistan’s worst industrial accident, which came just hours after another fire at a shoe factory in the eastern city of Lahore killed at least 25.

“That factory fire was a ‘planned sabotage/terrorist activity’ and ‘not an accidental fire’ carried out due to refusal to pay extortion (Bhatta) of Rs.20 (Twenty) Crores and partnership in factory profits by factory owners to office bearers namely Rehman Bhola and Hammad Siddiqui of MQM-A,” the investigation report, made public on Monday, said, referring to the Muttahida Qaumi Movement party of Altaf Hussain, Karachi’s most powerful and, until recently, untouchable political leader.

Initial investigations into the fire had determined that the death toll greatly increased because of illegal practices at the factory, reviving concerns about the regulation of Pakistan’s manufacturing sector, which is centered in Karachi.

But the investigation report by the joint investigation team has said it believed, unanimously, that the incident was not an accidental one, recommending that police file terrorism cases against Rehman Bhola, Hammad Siddiqui, Zubair Charia, Omer Hassan Qadri, Dr. Abdul Sattar, Ali Hassan Qadri, Iqbal Adeeb Khanum and four other unknown associates.

The MQM has not commented on the investigation report so far.


Pakistan launches privatization process for five power distributors under IMF reforms

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Pakistan launches privatization process for five power distributors under IMF reforms

  • Power-sector losses have pushed circular debt above $9 billion, official documents show
  • Move is tied to IMF and World Bank conditions aimed at cutting subsidies and fiscal risk

KARACHI: Pakistan has appointed financial advisers and launched sell-side due diligence for the privatization of five electricity distribution companies, marking a long-awaited step in power-sector reforms tied to International Monetary Fund (IMF) and World Bank programs, according to official documents shared with media on Monday.

The five companies, namely Islamabad Electric Supply Company (IESCO), Faisalabad Electric Supply Company (FESCO), Gujranwala Electric Power Company (GEPCO), Hyderabad Electric Supply Company (HESCO) and Sukkur Electric Power Company (SEPCO), supply electricity to tens of millions of customers and have long been a major source of financial losses for the state.

Pakistan’s power sector has accumulated more than Rs2.6 trillion (about $9.3 billion) in circular debt as of mid-2025, driven largely by distribution losses, electricity theft and weak bill recovery, according to official government data cited in the documents. The shortfall has repeatedly forced the government to provide subsidies, adding pressure to public finances in an economy under IMF supervision.

“The objective is to reduce losses, improve efficiency and limit the government’s fiscal exposure by transferring electricity distribution operations to the private sector,” the documents said, adding that sell-side due diligence for five distribution companies is under way as a prerequisite for investor engagement.

Two utilities, the Quetta Electric Supply Company and Tribal Areas Electric Supply Company, are excluded from the current privatization phase due to security and structural constraints, the documents said.

Power-sector reform is a central pillar of Pakistan’s IMF bailout program, under which Islamabad has committed to restructuring state-owned enterprises, improving governance and reducing budgetary support. The World Bank has also linked future energy-sector financing to progress on structural reforms.

Electricity distribution companies in Pakistan routinely report losses exceeding 20 percent of supplied power, far above international benchmarks, according to official figures. These inefficiencies have been a persistent obstacle to economic growth, investment and reliable power supply.

Previous attempts to privatize power distributors have stalled amid political resistance, labor union opposition and concerns over tariff increases. While officials have not announced a timeline for completing transactions, the launch of due diligence marks the most concrete step taken in years. International lenders and investors will now be closely watching whether Pakistan can translate this phase into completed sales, a key test of its ability to deliver on IMF-backed reforms.

In a related development in Pakistan’s privatization agenda, the government last month concluded the long-delayed sale of a 75 percent stake in national flag carrier Pakistan International Airlines (PIA) in a publicly televised auction. A consortium led by the Arif Habib Group emerged as the highest bidder with a Rs135 billion ($482 million) offer for the controlling stake, in a transaction officials have said will end decades of state-funded bailouts and inject fresh capital into the loss-making airline.