The Pakistan Tehreek-e-Insaf (PTI) government is considering privatising 10 more entities including Zarai Taraqiati Bank Limited (ZTBL) and two gas utility companies amid slow progress on one and a half dozen enterprises that have already been picked for privatisation.
The Utility Stores Corporation (USC) is also among the 10 entities that the Ministry of Privatisation has recently shortlisted for privatisation in the next phase, according to officials.
Initially, the list comprised of 11 government-owned entities but the Cabinet Committee on SOEs struck off the name of Pakistan Television and directed to pursue the other cases, said the sources. The entities that can be privatised in the next phase included ZTBL – the only specialised bank lending money to the agriculture sector.
ZTBL is the third specialised bank that the PTI government has picked for privatisation after the Small and Medium Enterprise (SME) Bank and First Women Bank Limited (FWBL).
Prime Minister Imran Khan is keen to give a major push to the privatisation agenda in his third year in power, as the line ministries neither controlled their losses nor restructured these enterprises.
Officials said that the PM wanted the power sector losses to be stemmed at any cost, even if the government has to outsource their management to the private sector.
The government’s intentions to privatise the ZTBL was clear for the last one year, as it had appointed a supra body of people who had restructured and privatised the loss making commercial banks in the past.
The supra body comprised of former finance minister Shaukat Tareen, Zubyr Soomro and Board of Investment Chairman Atif Bokhari.
The government has retained the supra body even after it finally appointed a regular ZTBL board that comprised people having rich banking background.
The ZTBL management is in the process of reducing the workforce through natural attrition, according to the officials. So far, except over 50 contractual hiring at senior positions, no recruitments have been made against 1,700 positions that fell vacant due to retirement of people, said a senior ZTBL official.
The bank was incurring losses but the quantum has significantly reduced to around Rs4 billion by end of December 2020, according to the senior official. The other entities that have been proposed for privatisation are Utility Stores Corporation, Sui Southern Gas Company Limited (SSGCL), Sui Northern Gas Pipelines Limited (SNGPL), Pakistan Tourism Development Corporation, Pakistan Expo Centres Private Limited, Pakistan Environment Planning and Architectural Consultants Private Limited, Overseas Employment Corporation Private Limited, National Investment Trust and National Engineering Services Pakistan Limited (NESPAK).
After holding meetings with the line ministries, the Ministry of Privatisation will present the list before the Cabinet Committee on Privatisation for its formal endorsement, said the officials. The privatisation secretary and the spokesperson of the privatisation ministry were not available for comments.
The officials said that this list was also presented before the last Cabinet Committee on SOEs meeting.
They said that the chairman of the committee, Dr Hafeez Shaikh, directed that the Ministry of Privatisation should coordinate with the line ministries. He also asked the ministry to further review the list of entities that can be either privatised or restricted.
During the first two years of the PTI government, the losses incurred by the government-owned entities increased two-third, which reflected poorly on the performance of the ruling party.
In October 2018, the PTI government decided to reduce the active list of privatisation from 65 to only 11 entities – almost all profitable ones. Later on, when Shaikh joined the cabinet as the finance adviser, he expanded the list to 19 entities.
But so far no loss making enterprise could be privatised in the last two and a half years. The PTI government has already dropped Pakistan International Airlines (PIA) from the list. It had first dropped the Pakistan Steel Mills (PSM) from its active list of privatisation but then again included it in June 2019.
Last month, the federal cabinet approved the transaction structure of the PSM. The sources said that this month the PSM Board has also approved a resolution to incorporate new subsidiary to sell the majority stake through the subsidiary.