Pakistan selling off state-owned firms in distress sales amid governance failures

ISLAMABAD: Poor governance and mismanagement due to political interference are leading to huge losses in Pakistan’s state-owned enterprises, after which they are put up for distress sale at throwaway prices, a Pakistani media report said.

An article in Pakistan’s Express Tribune points out that instead of reforming governance early, successive governments postpone difficult decisions. State-owned enterprises are routinely retained despite declining performance, political interference, and weak accountability. Only after they have accumulated massive losses and unsustainable debt does privatization suddenly become the chosen solution.

This pattern repeats itself across sectors with striking consistency. Professional management is gradually replaced by political appointments, commercial discipline erodes, and inefficiencies become normalized. Selling such companies after years of neglect and pouring in public funds, socializes losses and privatizes gains, the article pointed out.

Privatization in Pakistan has rarely been a deliberate or well-planned economic reform but a series of fire sales.

PIA illustrates this failure vividly. Once a respected regional airline, PIA was undermined by overstaffing, political meddling, and the absence of business logic. Successive governments treated the airline as a source of patronage rather than a commercial entity. Billions of rupees were spent to keep it afloat while service quality deteriorated and competitiveness vanished. Its eventual privatization was not strategic; it was an admission of prolonged governance failure, the article stated.

Supporters of privatization often cite telecom major PTCL as evidence that private ownership improves performance. Indeed, PTCL did achieve operational and technological improvements after privatization. Network modernization and service expansion did take place.

Yet this example also exposes the deep flaws in Pakistan’s privatization practices. Years later, thousands of former government employees and pensioners remain trapped in litigation over pensions, service regularization and post-privatization rights. These unresolved disputes highlight how human and legal costs were treated as secondary concerns. They reveal a process focused on completing transactions rather than safeguarding institutional responsibility, the article states. (IANS)

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