PTCL lost $80 million from the sale, and counties and railroad lands were also awarded. Image: file
Islamabad: A recent academic review showed that privatization in Pakistan has not produced the desired results.
The privatization process since 1991 has saved the country $11 billion, but the goals of improving efficiency and creating a healthy competition environment after privatization have not been achieved.
The review report comes at a time when the International Monetary Fund is urging the government to enact legislation to improve the efficiency and management capabilities of government agencies.
The Senate rejected the bill submitted in this regard, after which the Ministry of Finance asked the government to hold a joint session of Parliament to approve the bill under the terms of the International Monetary Fund.
A review report published in the Journal of Applied Economics titled “Public Sector Undertakings after Privatization.. Evidence from Pakistan, collected by Naseem Faraz and Dr. Ghulam Samad, indicates that the primary objectives of the country’s privatization program have not been achieved, mainly due to weak regulators and oversight systems, And there are disadvantages.
Nor is government interference in the regulatory system a secret. In this regard, the example of the regulatory body of the Pakistan Telecommunications Commission has been given.
The report claimed that the privatization of PTCL was not transparent. As a result of this deal, not only was there a loss of $80 crore, but also it was not possible to create an atmosphere of healthy competition in the market. The Pakistani government sold 26 percent of its shares to “Etisalat”, and also transferred the management to it, which was against the law since it was required to own 51 percent of the shares.
The government agreed that Etisalat will pay $2.6 billion, of which $1.4 billion will be paid in one lump sum, and the remaining $1.2 billion will be paid in nine installments at a value of $33 million. The government got only $1.8 billion from the deal and the remaining $800 million was never paid by Etisalat.
Ironically, the government also handed over all PTC properties to Etisalat, a controversial move because these properties were in fact owned by the provincial and railway governments of Pakistan, and there was no consultation.
The report indicates that despite the loss of billions of dollars, the monopoly or monopoly in the telecom sector in the country cannot be eliminated.