Privatization of State owned enterprises & its effect on employees

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There are 46 SOE’s out of which 25 are to be privatized, on the top of the list is PIA. Privatization plans of 46 entities and has cautioned government of its disastrous effects major being unemployment without driving any tangible benefits. It was in 1990 Pakistan entered in to privatization with the concept to sell loss making units. Money received 90% was to be utilized in retiring debts and 10% to be spent on social sector. But practically it did not happen and we kept borrowing loans, but in process we lost the units and the money many went in the hands of foreigners. Most important factor in privatization is to get maximum price but in our case we under evaluate and rules are framed to benefit the buyers by ignoring own interests. Unfortunately, our past record on privatization has been pathetic and valuable assets were sold at throw away price. It would be of interest to throw some light on some profitable units privatized. The PTCL was sold out in pea nuts, ABL was sold at Rs 11 billion with negative equity and HBL bigger 10 times than ABL was estimated Rs 22 billion and Pakistan Steel shares were estimated Rs 16.18 per share. As a matter of principle units privatized should exclude the land which is state property
A much better solution lies in gradual sale of shares through public on two counts, the asset will remain in the hands of Pakistan, and our own people will be benefited and fear of further unemployment and increasing income inequalities will not be there. In Pakistan the focus of policies has been to give concession to rich and pass on the entire burden on poor. The investment must secure precondition of economic growth instead of granting concessions and exemptions obtained in the name of investment as has been the practice in Pakistan. There is no point in citing examples of other countries, we must first set some own standards
There is no justification in out sourcing major airports of Pakistan as CAA is earning huge profit from all these major airports, why we should deprive ourselves from income and give it to private parties in the name of investment, instead reduce the airport taxes and improve upon customer handling services. There is no doubt that pursuit of the agenda of privatization, deregulation and liberalization shall reduce to some extent direct and indirect powers of patronage enjoyed by the state but there is no wisdom in throwing away our strategic assets to foreigners in the name of investment. New aviation policy revolves around creating more high profile jobs for cronies without any rationale. There cannot be two opinions since the creation of aviation division, instead of any improvement the situation has worsened as PIA continues to nose dive, people are not paid salaries for months a situation self-created first time. PIA once a pride of the nation with famous slogan “Great people to fly with”. It is true that PIA has been mismanaged so badly it is in shambles. Fares, quality of food even on international flights is much below the desired standard and complaints made are never entertained. Pakistan as a whole is suffering on account of bad governance and how PIA could be an exception. As long as we don’t rid of political influence and institutional pressures while appointing heads of organizations things will never improve but further deteriorate. PIA suffered greatly due to stupid statement of Minister for aviation when he announced at the floor of assembly that PIA has 262 pilots with fake licenses that included dead, retired and court cases that stands reduced to 34. Undoubtedly PIA has been one of the best airlines in the past and these very pilots and engineers were running the show. It was political interference that not only spoiled the airline but Steel Mill along with 32 state owned enterprises. Ministers statement caused humiliation and great damage caused to PIA in the country and internationally that resulted in ban on PIA. Question arises what prevented government not to initiate action against fake licenses when this fact was already known and only wake up after the crash of PIA plane on 22 May? Fake degrees ,fake licenses ,fake certificates are not restricted to Pakistan it is all over the world but such matters are handled intelligently without propagating internationally. There are reports about 400 Indian pilots licenses were also fake but they carried out scrutiny without making any hue and cry. Unfortunately our restructuring has always meant laying of lower staff throwing them out but you never hear laying of general managers directors instead huge fresh hiring is undertaken inducting people of own choice on hefty salaries.
There is no disagreement to revive PIA or for that matter any other organization’s right person at right place is the solution.Is it happening, the answer is emphatic No.The root cause has not been the surplus manpower but the shortages of planes and again it was a long term plan to harm PIA. This lone step helped foreign airlines to make billions by taking over PIA traffic. Emirates per week had roughly more than 40 flights a week. We sold lucrative routes, stopped direct flights to various destinations and made Dubai and Istanbul as hub thus restricting PIA movement. It was deliberate and certainly someone must have made some money.The salary bill is around 12% that is not much. It is unfair to blame PPP, induction of cronies has been on in all previous governments including present.
Question arises how many directors and general managers you require to run the fleet of 30 planes? Take the case of Pakistan Railwys they have one general manager. All fresh inductions to go first. Unfortunately, revival plan of PIA still not made public the concentration is how to lay off the lower staff. This job can be entrusted to superintendent he will produce better paper. There is already hue and cry on employment we have to be careful, immediate solution is to cut down 50% from top even otherwise austerity starts from the top not from bottom
It is recommended that those SOE be privatized which is dead loss. Selling or privatizing PIA and Steel Mill is not wise solution. It can be revived if given in the hands of experts and not cronies.