Photo courtesy PID
Interim Privatization Minister Fawad Hassan Fawad on Thursday informed Najy Benhassine, the country head of the World Bank in Islamabad, the government is committed to privatizing state-owned enterprises (SOEs) that are a substantial financial drain on government resources.
A meeting between the two officials in Islamabad primarily revolved around the caretaker government’s strategic agenda for privatization, specifically PIA, as well as other SOEs aimed at improving the performance of power distribution companies (DISCOs). “This concerted effort aims to rectify substantial financial losses incurred by these entities and thereby alleviate the fiscal burden on the government,” read a statement issued by the government on the meeting.
According to the statement, privatizing PIA is a foremost priority for the government due to the billions of rupees in losses incurred by it annually. Outlining the privatization plan for PIA, Fawad told Benhassine the government intended to engage the World Bank and other financial institutions at the initial phases of this effort. “The overarching objective is to attract much-needed private investment through the privatization process, thereby unlocking government funds for deployment in vital sectors,” the statement added.
During their meeting, the minister highlighted an intent to develop a comprehensive model for PIA, with the World Bank as key partner for potential future support. He also discussed annual losses of DISCOs, currently recorded at $2.5 billion, adding that two sessions with the International Finance Corporation (IFC) had already been held to formulate a long-term concession model to mitigate these losses.
Per the statement, ongoing discussions with the IFC are expected to yield a concrete strategy for private sector participation in DISCOs, with a primary objective of privatizing to achieve loss reduction and performance enhancement.
The meeting between the minister and World Bank official further encompassed a broader range of support areas, encompassing advisory and legal assistance; considered vital aspects for ensuring the successful execution of the privatization process. According to the statement, the meeting concluded with a positive resolve of mutual cooperation to address the pressing financial challenges posed by PIA and DISCOs. “This dialogue demonstrates the government’s unwavering dedication to confronting the financial hurdles posed by underperforming SOEs,” it said, adding the World Bank’s support and collaboration was vital throughout this critical process.
Also on Thursday, Benhassine called on caretaker Planning Minister Muhammad Sami Saeed and discussed the progress and implementation of various projects for the rehabilitation and reconstruction of flood effected areas. The meeting also reviewed the current status of project implementation, with Saeed expressing his gratitude for the ongoing support provided by the World Bank.