PM says Pakistan to privatize all state-owned entities except ‘strategically important’ ones

Pakistan Prime Minister Shehbaz Sharif (left) chairs a meeting of the Cabinet Committee on Privatization in Islamabad, Pakistan on May 14, 2024. (PTV News)
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Updated 14 May 2024
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PM says Pakistan to privatize all state-owned entities except ‘strategically important’ ones

  • Finance Minister Aurangzeb last week said there is “no such thing as strategic” public entities
  • Privatization of debt-ridden state entities is major reform demanded by IMF as Pakistan negotiates new bailout

KARACHI: Prime Minister Shehbaz Sharif announced on Tuesday that his government would privatize all state-owned enterprises (SOEs) except for those deemed “strategically important” or essential ones, state-owned media reported, as Islamabad looks to overhaul its public entities to improve their performance.

The announcement is in direct conflict with Finance Minister Muhammad Aurangzeb’s statement from Sunday in which he said that all public entities would be handed over to the private sector. The minister had said he and Deputy Prime Minister Ishaq Dar were on the same page that “there is no such thing as a strategic SOE.” 

Former finance minister Dar had chaired a meeting of the Cabinet Committee on Privatization on May 10 in which he had said the government’s business would only be limited to essential or strategic SOEs. Dar said while priority would be accorded to loss-making entities, even SOEs who were earning profits would be considered for privatization.

PM Sharif chaired a high-level meeting on matters related to the Ministry of Privatization and Privatization Commission on Tuesday, the state-run Radio Pakistan reported.

“Prime Minister Shehbaz Sharif has announced to privatize all government-owned enterprises with the exception of strategically important state-owned enterprises,” Radio Pakistan said. “The Prime Minister directed all federal ministries to take necessary action in this regard and cooperate with the Privatization Commission.”

Pakistan’s Finance Division has defined strategic entities as those whose functions have significant strategic, security, or social importance in addition to economic values for the country. It has defined essential SOEs as those which are critical for the execution of government policies and where the private sector is unable to assume those functions due to various reasons. 

The Oil & Gas Development Limited (OGDCL), Pakistan State Oil (PSO), National Bank of Pakistan, and hydropower projects are considered strategically important enterprises owned by the government. However, the government has not classified strategic assets for privatization yet.

Pakistan agreed to overhaul its public entities under a $3 billion financial bailout agreement it signed with the International Monetary Fund (IMF) last year, a deal that helped it avert a sovereign debt default in 2023. The IMF has said Pakistan’s SOEs whose losses are burning a hole in government finances would need stronger governance. Pakistan is currently negotiating with the international lender for a larger, longer program for which it must implement an ambitious reforms agenda, including the privatization of debt-ridden SOEs.

Among the main entities Pakistan is pushing to privatize is its national flag carrier, the Pakistan International Airlines (PIA). The government is putting on the block a stake ranging from 51 percent to 100 percent.

Sharif instructed authorities to ensure transparency in the privatization process of all state-owned entities, including the PIA. 

“He directed to televise live Pakistan International Airlines Company Limited’s privatization including bidding and other important steps,” Radio Pakistan said. “The process of privatization of other institutions will also be broadcast live.”

The prime minister was informed that the pre-qualification process for PIA’s privatization would be completed by the end of May. He was told loss-making SOEs would be privatized on priority and that a “pre-qualified panel of experts” is being appointed in Pakistan’s Privatization Commission to speed up the process.

Separately, Aurangzeb chaired a meeting of the Cabinet Committee on State-Owned Enterprises on Monday which was attended by ministers of maritime affairs, economic affairs, housing and works, the governor of Pakistan’s central bank and other officials. The meeting was held to evaluate the performance of the country’s public entities and review the progress of the government’s privatization agenda.

Aurangzeb directed concerned ministries and divisions to submit proposals for the categorization of their respective public entities by May 20. The step is aimed at reviewing the rationale for retaining any commercial functions within the public sector, the finance ministry said.

“The objective is to retain only the essential functions within the public sector & to assign the remaining functions to the private sector,” it said. “At the same time the entities which remain in public sector have to be more competitive, accountable, and responsive to the needs of citizens.”

Participants agreed to foster transparency, efficiency, and sustainable growth within the SOEs, reflecting the government’s dedication to ensuring the optimal utilization of public resources, the ministry said.

Tahir Abbas, the head of research at Arif Habib Limited, considered Pakistan’s largest securities brokerage company, said the conflicting statements between Sharif and Aurangzeb showed lack of coordination between them. 

“There seems lack of coordination between them on the classification of assets for privatization,” he told Arab News. 


Pakistan recovered over $370 million in nationwide campaign against power theft — report

Updated 27 sec ago
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Pakistan recovered over $370 million in nationwide campaign against power theft — report

  • The South Asian nation’s power sector has long been plagued by high rates of electricity theft and distribution losses
  • Authorities have arrested 83,000 individuals for involvement in power theft since the announcement of a campaign this year

ISLAMABAD: Pakistan has recovered more than $370 million in a nationwide campaign against electricity theft, Pakistani state media reported on Sunday.
The South Asian nation’s power sector has been plagued by high rates of electricity theft and distribution losses, resulting in accumulating debts across the production chain.
In March, Pakistan’s Interior Minister Mohsin Naqvi announced that authorities had launched a “massive crackdown” against electricity and gas theft, aiming for fair distribution of utilities and access to all citizens.
“In a countrywide campaign against power pilferage, 105 billion ($377 million) rupees have been recovered,” the state-run Radio Pakistan broadcaster reported. “More than 83,000 individuals involved in power theft have been arrested.”
From June 30 till July 17, authorities collected more than Rs1 billion from power pilferers in Punjab’s Lahore, Gujranwala, Faisalabad and Multan cities as well as in the federal capital of Islamabad, according to the report.
Another Rs430 million were recovered from Peshawar, Hyderabad, Sukkur and Quetta during this period. This was a result of actions taken by the government to revive the country’s economy and bring people out of the power crisis.
Relevant institutions were determined to continue their operations until complete elimination of power theft from the country, it added.
The report comes days after Pakistan reached a staff-level agreement with the International Monetary Fund (IMF) for a new $7 billion loan.
Energy sector debt has already been a main issue that the IMF has highlighted in tackling Pakistan’s fiscal deficit, telling the South Asian nation to prevent further accumulation of circular debt in its power sector arising from subsidies and unpaid bills.
The lender has asked to implement reforms to reduce costs by improving electricity transmission and distribution, moving captive power into the grid, improving governance, and combating theft.


Pakistan to push Chinese utilities in Pakistan to switch to domestic coal

Updated 21 July 2024
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Pakistan to push Chinese utilities in Pakistan to switch to domestic coal

  • Such a transition would benefit the Chinese-owned plants in Pakistan by reducing pressure on Islamabad’s foreign exchange reserves
  • The transition could save Pakistan over $700 million a year in imports, translating to a drop of as much as Rs2.5 in per unit electricity price

ISLAMABAD: Pakistan this month will ask Chinese power plants operating in the country to shift to using coal from Pakistan’s Thar region rather than imported coal, the power minister said on Sunday.
Islamabad may also begin talks on re-profiling Pakistan’s energy sector debt during the visit to Beijing, Awais Leghari, head of the energy ministry’s Power Division, told Reuters.
Leghari will be part of the delegation to discuss structural reforms to the power sector suggested by the International Monetary Fund (IMF), which last week agreed on a $7 billion bailout for the heavily indebted South Asian nation.
Neighbouring China has set up over $20 billion worth of energy projects in Pakistan.
“One of the key purposes of going along is the conversion of our imported coal units to the local coal. That would have a huge impact on the cost of energy, of power in the near future. So that is one of the biggest (items on the) agenda,” Leghari said in an interview.
Such a transition would benefit the Chinese-owned plants in Pakistan by reducing pressure on Islamabad’s foreign exchange reserves, he said, making it easier to repatriate dividends and offering a better return in dollar terms.
The transition could save Pakistan more than 200 billion Pakistani rupees ($700 million) a year in imports, translating to a decrease of as much as 2.5 Pakistani rupees per unit in the price of electricity, Leghari said.
In April a subsidiary of conglomerate Engro agreed to sell all of its thermal assets, including Pakistan’s leading coal producer, Sindh Engro Coal Mining to Pakistan’s Liberty Power. Liberty said the decision stemmed from Pakistan’s foreign exchange crunch and its indigenous coal reserve potential.
The minister declined to elaborate on the possible talks with China over re-profiling energy debt.
Pakistan’s power sector has been plagued by high rates of power theft and distribution losses, resulting in accumulating debt across the production chain — a concern raised by the IMF.
The government is implementing structural reforms to reduce “circular debt” — public liabilities that build up in the power sector due to subsidies and unpaid bills — by 100 billion Pakistani rupees ($360 million) a year, Leghari said.
Poor and middle-class households have been affected by a previous IMF bailout reached last year, which included raising power tariffs as part of the funding program that ended in April.
Annual power use in Pakistan is expected to fall consecutively for the first time in 16 years as higher tariffs curb household consumption, despite summer temperatures surging to near records, which typically boosts air conditioning and fan use.
“We have seen a shrinking demand trend in the past year or year and a half, and we are expecting this to continue unless we rationalize the price of power,” Leghari said, adding that the government’s major challenge was get demand to stop shrinking.
He said that since the per-unit tariff for power is more expensive, both urban and rural households are moving toward alternatives such as solar.
“Right now we have close to 1,000 megawatts that are on the grid itself in the form of net metering systems and others. It’s a very conservative estimate that (solar) could be five to six times more than that on the grid right now,” Leghari said.


Pakistan’s Hajj Medical Mission wraps up operations, says treated over 169,000 pilgrims 

Updated 21 July 2024
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Pakistan’s Hajj Medical Mission wraps up operations, says treated over 169,000 pilgrims 

  • Pakistan Hajj Medical Mission also treated pilgrims from other countries who sought assistance, says director 
  • Over 400-member mission provided pilgrims with health care facilities in Makkah and Madinah since May 9

ISLAMABAD: The Pakistan Hajj Medical Mission wrapped up its operations in Saudi Arabia this week after treating over 169,000 pilgrims in the kingdom, the mission’s director confirmed on Sunday. 

Over 160,000 Pakistanis attended this year’s annual Hajj pilgrimage, which ran from June 14-19. Pakistan established two hospitals and 11 dispensaries in the holy cities of Makkah and Madinah on May 9. 

“The Pakistan Hajj Medical Mission completed its operations in Saudi Arabia on July 20, and since the start of services on May 9 this year, almost 169,000 pilgrims received free health treatment,” Brig. Jamil Ahmed Lakhair, the mission’s director, told Arab News over the phone from Makkah.

Lakhair said that out of the total number of patients, at least 60 percent were male while 40 percent were women. He said the mission also provided services to pilgrims from other countries who sought medical assistance.

Lakhair said a dedicated team of over 400 members from the medical mission tirelessly performed their duties to assist Pakistani pilgrims in Saudi Arabia during the annual Islamic pilgrimage.

“More than 19000 lab tests were done on almost 4000 patients and around 5000 patients availed dental treatment facilities, including minor procedures,” he revealed. Lakhair said over 3,000 patients availed radiological facilities, including ultrasound, at the hospital.

The Pakistani official credited the Saudi government for ensuring excellent medical facilities, praising their robust patient evacuation system and well-equipped hospitals, adding that Pakistan’s medical mission helped pilgrims access these facilities.

“Two hundred and fifty patients treated in tertiary care facilities of the kingdom’s hospitals as indoor cases,” Lakhair said. 

He shared that over 12,000 pilgrims were treated as emergency cases while 188 bed-ridden patients were taken to Arafat for Hajj rituals in ambulances and buses.

He said respiratory tract infections and musculoskeletal problems were the most common among pilgrims, accounting for 18 percent of the total cases, followed by gastrointestinal problems at 12 percent, diabetes mellitus at 11 percent, unspecified fever at 9 percent, and cardiovascular diseases, including hypertension and ischemic heart diseases, at 5 percent
 


Thousands continue sit-in protest in northwestern Pakistan after shooting incident 

Updated 21 July 2024
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Thousands continue sit-in protest in northwestern Pakistan after shooting incident 

  • Gunfire targeting Bannu peace rally triggered stampede that killed 2, injured over 20 on Friday
  • Protesters form 30-member committee to hold talks with Khyber Pakhtunkhwa government 

PESHAWAR: Thousands of protesters continued to stage a sit-in protest for the second consecutive day in the northwestern city of Bannu on Sunday, demanding peace days after a shooting incident triggered a stampede that caused the deaths of at least two people. 
At least two persons were killed and more than 20 injured after gunfire triggered a stampede at the procession attended by tens of thousands of people in the northwestern city on Friday. The demonstration was held at a time when Khyber Pakhtunkhwa (KP) province, which borders Afghanistan, has witnessed a surge in attacks on security forces, government officials and anti-polio vaccination teams in recent weeks.
The shocking increase in daily attacks led the residents of the area to demand peace only a few days after 10 soldiers were killed by militants in Bannu’s cantonment area.
Following the attack, thousands of protesters staged a sit-in protest on Saturday in Bannu, demanding peace and an end to further military operations in KP. 
“Talks are being held between the district administration and local elders to restore durable peace in the area,” KP government spokesperson Muhammad Ali Saif said in a statement. “A meeting of elders will soon be arranged with the chief minister.”
Local residents and some Pakistani politicians accused the security forces of the shooting incident, though the KP spokesperson was reticent about who was responsible.
Protesters have formed a 30-member committee to hold talks with the provincial government on the issue. 
Dil Nawaz, one of the participants of the protest, said tribes from Bannu district were represented in the 30-member committee. He said the committee was empowered to hold talks with the KP government to ensure their demands were accepted. 
“Politicians from the Awami National Party (ANP), Pakistan Tehreek-e-Insaf (PTI) and elders from the adjacent Lakki Marwat and Karak districts have visited Bannu, are meeting protesters and assuring them of their support to achieve peace,” Nawaz said. 
He said the committee members comprised local elders, current and former lawmakers of the national and provincial assemblies of Pakistan, members of the Bannu Chamber of Commerce, religious leaders, lawyers and journalists. 
“We will continue with our protest till our demands are not met,” Nawaz vowed. “We were protesting peacefully and this [shooting] happened. This was an unjust act against us.”
JUDICIAL COMMISSION
A six-member opposition alliance, the Tehreek Tahafuz Ayeen-e-Pakistan (or the Movement to Protect the Constitution of Pakistan) demanded the formation of a judicial commission to probe the shooting incident on Saturday.
The demand was put forward after the alliance met on Saturday to discuss the issue. 
“They demanded that an independent judicial commission should be constituted immediately to probe into the deaths and injuries caused by the firings on Bannu Aman [Peace] March,” a press release by the alliance read.
The alliance stressed the need for a judicial commission to probe the incident, saying it should be headed by a serving judge. It said the judge should be “free from any external pressure” to ensure a transparent investigation into the Bannu incident.

The press release added the meeting criticized senior police and provincial administration officials, saying they had “miserably failed in restoring peace in the province” and must be dismissed.


Pakistan strongly condemns attack on Frankfurt consulate by ‘gang of extremists’

Updated 21 July 2024
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Pakistan strongly condemns attack on Frankfurt consulate by ‘gang of extremists’

  • People carrying Afghanistan’s flag attacked Pakistan’s Frankfurt consulate on Saturday, took down country’s national flag
  • Pakistan calls on German authorities to take “immediate measures” to arrest and prosecute those involved in incident 

ISLAMABAD: Pakistan’s foreign office spokesperson on Sunday strongly condemned an attack on its Frankfurt consulate by what it described were a “gang of extremists,” urging German authorities to take action and arrest those involved in the incident. 

Footage on social media from Saturday showed a large crowd of angry people carrying Afghanistan’s national flag, jumping the fence into the Pakistan consulate in Frankfurt and taking down Pakistan’s flag.

As per various Pakistani media reports, the people were reportedly Afghan nationals who pelted the consulate with stones during their protest. 

“Pakistan strongly condemns yesterday’s attack by a gang of extremists on its consulate in Frankfurt, Germany and the failure of the German authorities to protect the sanctity and security of the premises of its consular Mission,” Foreign Office Spokesperson Mumtaz Zahra Baloch said in a statement. 

Baloch stressed that under the Vienna Convention 1963, it is the responsibility of the host country to protect the sanctity of the consular premises and ensure the security of diplomats.

“In yesterday’s incident, the security of Pakistan’s consulate in Frankfurt was breached, endangering the lives of its consular staff,” she said. 

“We are conveying our strong protest to the German Government.”

The spokesperson urged the German government to ensure the security of Pakistan’s diplomatic missions and staff in Germany. 

“We also urge the German authorities to take immediate measures to arrest and prosecute those involved in yesterday’s incident and hold to account those responsible for the lapses in security,” she said.

In a separate message on social media platform X, Pakistan’s embassy in Germany called on the people to remain “patient and calm” after the incident. 

PAKISTAN-AFGHANISTAN TENSIONS 
 
Tensions between Pakistan and Afghanistan have steadily increased since the Afghan Taliban seized Kabul in August 2021. Pakistan has witnessed a surge in militant attacks on its soil since November 2022 after a fragile truce between Islamabad and the Pakistani Taliban, or the Tehreek-e-Taliban Pakistan (TTP) outfit broke down.

Pakistan blames Afghanistan for sheltering TTP militants and has asked Kabul to take action against them. However, Afghanistan denies the allegations and has warned Pakistan against carrying out its threats of conducting cross-border attacks in Afghanistan.

Tensions between both countries escalated further in March this year after Pakistan struck alleged militant targets inside Afghanistan. Kabul said the strikes killed three women and three children.

Ties between the two countries also took a hit after Pakistan last year launched a deportation drive to expel undocumented foreigners from its country, which mainly targeted Afghan nationals. 

Over 600,000 Afghan nationals have since last year left Pakistan and returned to their country, which they had left over the past couple of decades due to war and persecution.