NOW when the present government is about to leave, some very important agenda is likely to left unfulfilled on the economic front. The government kept taking pride in introducing the privatization ordinance to regulate the disinvestment activities during the last three years.

The government did not miss any opportunity in claiming that it was ensuring transparent process of privatization. However, the tall claim of getting $3 billion by disinvesting major state sector entities has finally proved to be a mere slogan.

The most depressing news is that the Privatization Commission (PC) has officially announced that it is not taking up the privatization of the much-awaited Pakistan Telecommunication Company Limited (PTCL), although three international parties have been prequalified for this purpose which include a Saudi Arabia-based business group of Lebanon’s Prime Minister Rafiq Hariri.

The government was hoping to collect through privatization $1 billion in 2001 and another $2 billion (total $3 billion) before it leaves the office following the October 10 general elections.

But the credit goes to the PC for touching the major transaction like privatizing the LPG business of Sui Southern Gas Pipeline Company Limited (SSGPL) and Sui Northern Gas Pipeline Company Limited (SNGPL), the remaining government’s shares in the oil and gas fields. But the question is: why the PC could not disinvest its roughly 50 units that it planned for collecting $3 billion?

The Minister for Privatization, Altaf Saleem, who is also the chairman of the PC is on record having said that his organization continued selling state entities even there was the US bombing in Afghanistan and bomb blasts in major cities of Pakistan. But why then refuge was taken in 9/11 events and the nation was told that investors were not ready to come in this part of world, at least for the time being.

The privatization of the PTCL was the test case and such it was very prestigious transaction for the PC. Since last month, it was very much on the agenda of the PC but now all of sadden it was announced that it was being postponed, reasons best known to the PC officials and other government authorities.

The PC team is leaving a lot in the pipeline as it has failed to privatize major sector units and now the new the next government will have to take a decision about it. Naturally, it will take some time for it to plan and finalise strategy about the privatization. It may take at least six months to finalise any new deal. The representatives of the major political parties, specially the PPP and PML(N) have been objecting to the present privatization process and at time said that they would reverse various deals when they come into power. Therefore, nobody has any idea what is going to happen after October this year.

While the Nawaz government had nothing left in the pipeline except the PTCL and couple of insignificant gee units, the present government is leaving behind major transactions about which nothing can be said as to what would happen to them and this include the Karachi Electricity Supply Company Limited (KESC), Oil and Gas Development Corporation (OGDCL), Pakistan Petroleum Limited (PPL), Pakistan State Oil (PSO) and the remaining government’s shares in the oil and gas sector. Also the Habib Bank Limited, the National Bank Limited and many units of the Development Financial Institutions (DFIs) which had been lined up for privatization.

What has achieved by the PC includes the controversial UBL transaction about which President of the MCB Aftab Manzoor said that his group will reopen the issue in future. What does it signify? In a statement he has expressed disappointment and displeasure the way the UBL transaction was conducted.

The accelerated privatization was considered obsoletely essential for tiding over the payment crisis which has otherwise been eased to some extend due to bilateral and multilateral funding offered in the wake of 9/11. This acceleration was being considered important signalling value for the role of the private sector and to generate confidence. At the same time, it was being said that the accelerated process will help reduce the losses of public sector corporations which have contributed to public debt build up in the past. According to the President, General Pervez Musharraf, there is a haemmoraging of Rs100 billion annually due to losses and inefficient state sector.

One the major reasons for failure in the disinvestment of the PTCL and the OGDCL was the lack of government commitment to overcome the resistance of management and labour related issues.

Generally, the officials have been saying that accelerated disinvestment process was critical to give a strong signal to the local and foreign sectors that the government wanted to shed direct public sector industries and was genuinely committed to private sector development. It was also said that the privatisation will help to improve efficiency, reduce losses in the public sector and help mobilise foreign exchange resources to retire debt and build up foreign exchange reserves. However, not much was done to achieve these goals.

Another major unfilled decision is the setting up of debt coordination office in the ministry of finance which was proposed by Debt Reduction and Management Committee of Dr. Pervez Hasan of the World Bank.