The privatisation process turned out to be futile exercise as none of the major public sector's entities could be offered for sell-off in the outgoing fiscal year. The privatisation proceeds' share in inflows remained only Rs 1.65 billion in 2007-08 against Rs 75 billion in 2006-07. However, the government expects Rs 25.1 billion from the privatisation proceeds in fiscal year 2008-09.
The reversal of Pakistan Steel Mills sell-off by the Supreme Court of Pakistan (SCP) proved to be a turning point in halting the privatisation of public sector entities.
The apex court had struck down PSMC sell-off on technical and legal grounds and directed the government to follow the set procedure before selling any public sector entity. Although the Privatisation Commission asserted the privatisation programme was on the track, but practical the process halted.
The poor performance of different privatised public sector entities such as Karachi Electric Supply Company (KESC) also hit the process hard. Debate on credibility of the sell-off programme and definition of strategic assets remained the two gray areas of the privatisation programme.
The privatisation process of Pakistan State Oil (PSO), Oil and Gas Development Company (OGDC) and PSM's sell-off became controversial due to stiff resistance put up by certain quarters on head of strategic assets controversy. The political turmoil and uncertainty also made privatisation difficult for the government. The investors minutely study political environment and law and order situation before investing in the country.
Comments
Comments are closed.