ISLAMABAD, Oct 18: The government on Thursday formally allowed the management of the Pakistan Telecommunication Company Limited (PTCL) to lay off more than 29,000 employees under its Rs17 billion voluntary separation scheme (VSS).

The decision was taken at a meeting of the Cabinet Committee on Privatisation (CCOP), presided over by Prime Minister Shaukat Aziz.

Sources said that Rs17 billion required for staff reduction by almost 60 per cent would be shared equally by the government and Etisalat — the UAE-based management of the PTCL.

It would probably be the largest ever layoff in Pakistan’s history in terms of percentage of the workforce when the planned voluntary separation scheme is implemented.

The meeting was informed that the package also offered retention benefits to staff who would avail themselves of the separation scheme but were required to be retained by the management. The PTCL workers’ unions have opposed the separation scheme but the sources claimed they had agreed to the ‘attractive package’.

According to an official announcement, the CCOP approved the voluntary separation scheme. The IT & Telecom secretary briefed the committee on the salient features of the scheme, aimed at making the company more competitive, efficient and beneficial for the low-paid employees.

It will be offered by the end of October and employees would be given two months’ time to express their option. There would be no compulsion and the employees would be free to exercise their option, the announcement said.

It said the prime minister emphasised that the voluntary character of the scheme should be ensured in its implementation and the low-paid employees should get the maximum benefit. The scheme must ensure non-discriminatory treatment to employees who opted to avail themselves of this package, he said.

The sources said the committee also reviewed the future privatisation plan and was informed that the next transaction would be the issue of 15-20 per cent global depository shares of the National Bank of Pakistan in December. The exact size of the transaction would be decided later.

The statement said the CCOP was informed that the subscription results of the initial public offering of the HBL had been very encouraging and about 419,000 smaller investors participated in the IPO.

The prime minister said that it reflected the confidence of investors in the policies of the government. Mr Aziz said the concept of privatisation did not necessarily mean to sell off the assets of the country. The philosophy behind privatisation is that the government should focus its attention on making people-friendly and development-oriented policies while the private sector should run the business on competitive terms so as to bring the country at par with the developed nations.

The meeting was informed that the privatisation proceeds during the last financial year (2006-07) amounted to Rs120 billion, against a budgetary target of Rs75 billion. The prime minister directed the Privatisation Commission to adopt more innovative and proactive approach to cut down impediments and step up the privatisation process of the projects under process.

Meanwhile, the PTCL union leaders appeared to be largely unclear about the package. “It is difficult to comment at the moment because the package has not been announced. PTCL employees do not know how the package will benefit them because we have heard it definitely is not what the management had promised to the employees,” said Rana Hassan, central secretary general of the employees’ union, the Collective Bargaining Agent (CBA), and head of the VSS committee representing PTCL workers.