One would imagine eighteen months is long enough to prepare summary tables showing the performance of Pakistan’s state-owned enterprises (SOE), especially when the document is being prepared by a ministry as powerful as the Finance Ministry. But one imagines wrong!
The latest ‘Federal Footprint: SOEs performance review’ for the fiscal year 2015 is replete with errors that question the credibility of the document. For instance, OGDC had 9,928 employees as per its FY14 report, but in FY15 the previous year’s data was revised to 14,480. In absence of any explanation, it is natural for doubts to grow like wild plants. Or consider the fact that power distribution companies in Quetta and Peshawar had a grand total of ‘zero’ employees in FY15.
It may be so that Finance Ministry was unable to get the relevant information from some of the state-owned firms. The contention is that if the government is running this exercise of putting together all the relevant information and making it public, then it might as well do a good job. At the least, it should explain why it wasn’t able to get the information, and what is it doing to ensure the same doesn’t happen next year, because such errors that question the accuracy of the document also existed in last year’s report. Indifference to public accountability does not suit a Finance Minister who touts becoming a signatory to Open Government Partnership.
Onto SOEs performance! Much like the year before, the business of profit-making is mostly confined to up-and-down-stream oil sector firms, and financial businesses such as the NBP and ZTBL. In FY15, the government received a total of Rs65.85 billion in dividends from the SOEs, of which nearly 84 percent was contributed by just three firms, namely OGDC (Rs31.4bn), GHPL (Rs8.5bn), and PPL (Rs15.9bn).
Meanwhile, the business of loss-making continued in usual quarters: the Discos, the Gencos, PIA, PSM, Railways, Post Office, and the NHA. The combined losses of these SOEs alone were Rs215 billion in FY15. To put that in context, SOE losses in FY15 from the 13 entities mentioned in the table were 40 percent of that year’s revised PSDP spending, and 0.8 percent of that year’s GDP.
When the PML-N took office it promised it would reform public sector enterprises. Those promises haven’t been fulfilled. The government has also failed to meet it privatisation targets year after year, sans the stock sale at the local bourse, which is not exactly privatisation.
It also took a loan from the Asian Development Bank in 2014 to work on PSE reforms, conduct sectoral studies for deregulation, design plans for privatisation, and so on and so forth. Under that loan, the Finance Ministry was to set up a project monitoring unit at the finance division. To date, the project monitoring unit hasn’t been set up and for all sense and purpose the project remains dormant. Sources say the government is expected to get a new loan for PSE reforms of about $300 million by the end of this month from the ADB. Before the government signs on the dotted line, it would do well to show what it achieved under the previous PSE reform project.