Pakistan’s state-owned enterprises (SOEs) are increasingly being forced into distress sales, driven by years of mismanagement, political interference, and mounting financial losses, according to a report by the Express Tribune. Analysts warn that privatisation in the country has emerged less as a planned reform measure and more as a reactive response to prolonged institutional failure.
The report highlights a recurring pattern in Pakistan’s economic governance, where successive governments postpone difficult reform decisions and continue to operate underperforming SOEs despite declining efficiency and accountability. Privatisation, often pursued after entities accumulate unsustainable debt and losses, is typically implemented at heavily discounted valuations.
Over time, professional management within these enterprises is replaced by politically appointed personnel, eroding commercial discipline and normalising inefficiency. Large sums of public money are injected to keep these companies afloat, only for them to be sold off later at low prices, effectively socialising losses while privatising gains, the report notes.
Pakistan International Airlines (PIA) is cited as a prominent example of this pattern. Once a respected regional airline, PIA’s decline has been attributed to chronic overstaffing, political meddling, and a lack of business-oriented decision-making. Successive governments treated the airline as a source of patronage rather than a commercial entity. Billions of rupees were spent to maintain operations, but without structural reform, its eventual privatisation reflected governance failure rather than strategic restructuring.
While privatisation advocates point to Pakistan Telecommunication Company Limited (PTCL) as a success story, the report questions the long-term benefits. Although PTCL witnessed network modernisation and service expansion, thousands of former employees and pensioners remain embroiled in legal disputes over pensions, service regularisation, and post-privatisation entitlements. This underscores a focus on completing transactions rather than ensuring institutional accountability.
The report also challenges assumptions that privatisation automatically benefits consumers. K-Electric, for instance, has seen electricity tariffs rise to record levels post-privatisation. Experts argue that without strong and independent regulatory frameworks, selling public enterprises risks replacing government monopolies with private ones wielding greater pricing power and less accountability.
International comparisons further illustrate these risks. Britain’s privatised rail sector has experienced fragmentation, delays, high fares, and ageing infrastructure, while publicly owned systems in Germany and France operate modern, high-speed networks efficiently and reliably.
The Express Tribune concludes that Pakistan’s experience underscores the need for governance reforms, professional management, and robust regulatory oversight before privatisation. Without these measures, fire-sale privatisation may offer short-term fiscal relief but risks long-term economic and social consequences.
