Prime Minister Shehbaz Sharif instructed on Tuesday the Privatisation Commission to carry out the privatisation of all state-owned enterprises (SOEs), excluding the strategic ones, regardless of their profitability or financial losses.

He said this while presiding over a “high-level” meeting to review the matters related to the Ministry of Privatisation and Privatisation Commission.

PM Shehbaz directed all the federal ministries to carry out the necessary procedures and extend their cooperation with the Privatisation Commission for the purpose.

The premier’s directives come two days after Finance Minister Muhammad Aurangzeb told a pre-budget conference that there was no such thing as strategic SOE. “Dar Sb chaired the Cabinet Committee on Privatisation meeting on Friday. We [I and Dar Sb] are absolutely on the same wavelength that there is no such thing as strategic SOE,” he said.

According to Aurangzeb, there would be public-private partnership and we will accelerate the privatisation agenda. He added that local investors were bidding for the Pakistan International Airlines and the Islamabad International Airport.

In the meeting, the ministry and the commission presented a roadmap for the Privatisation Program 2024-29. The prime minister said the government had nothing to do with running the businesses but was mandated to facilitate the investors.

He was of the view that the privatisation of SOEs would save the taxpayers’ money to help the government provide quality services to the people.

While reiterating the government’s commitment to a transparent process, the prime minister directed his team to live telecast the bidding and other procedures of the privatisation of Pakistan International Airlines and other entities.

During the briefing on the progress in the SOEs’ privatisation, officials told the participants that the pre-qualification process for PIA privatisation would be completed by the end of this month.

The consultation for privatisation of Roosevelt Hotel was under way and the government-to-government transaction of the First Women Bank was in process with the United Arab Emirates.

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They added that the power distribution companies (DISCOs) had been included in the Privatisation Program 2024-29 and the privatisation of loss-making SOEs would be prioritised.

A pre-qualified panel of experts would be appointed at the commission for a swift and transparent privatisation process, they added.

Federal ministers Khawaja Asif, Muhammad Aurangzeb, Jam Kamal Khan, Awais Ahmed Leghari, Abdul Aleem Khan, Musaddik Malik and Ahad Khan Cheema, PM’s Coordinator Rana Ehsan Afzal, and relevant senior officers attended the meeting.

Patchy success so far

Past privatisation drives have been patchy, mainly due to a lack of political will, market watchers say.

Any organisation that is involved in purely commercial work can’t be strategic by its very nature, which means there can’t be any strategic commercial SOEs, former privatisation minister Fawad Hasan Fawad told Reuters on Tuesday.

“So to me there are really no strategic SOEs,” he said.

“The sooner we get rid of them the better. But this isn’t the first time we have heard a PM say this and this may not be the last till these words are translated into a strategic action plan and implemented.”

Islamabad has for years been pumping billions of dollars into cash-bleeding SOEs to keep them afloat, including one of the largest loss-making enterprises Pakistan International Airline, which is in its final phase of being sold off, with a deadline later this week to seek expressions of interest from potential buyers.

Pakistan has listed 25 entities and assets on its privatisation list, including the PIA. A majority of the entities are in the power sector, including four power plants, two of which are over 1,200MWs, as well as 10 generation and distribution companies.

The list also includes the valuable Roosevelt hotel in New York’s Manhattan and two insurance companies.

The pre-qualification process for PIA’s selloff will be completed by end-May, the privatisation ministry told Tuesday’s meeting, adding discussions were underway to sell the airline-owned Roosevelt Hotel in New York.

It said a government-to-government transaction on First Women Bank Ltd was being discussed with the United Arab Emirates, and added that power distribution companies had also been included in the privatisation plan for 2024-2029.

“The loss-making SOEs should be privatised on a priority basis,” Sharif said.

(With input from Reuters)