Telephone Industries of Pakistan: Defence ministry’s offer to take over company rejected

Ministry wants the government to clear all liabilities of the company

ISLAMABAD: The Ministry of Information Technology has turned down the offer of defence ministry that was willing to take over Telephone Industries of Pakistan if its liabilities were cleared, documents show.

In a meeting of the Cabinet Committee on Privatization last month, the Privatization Commission told the participants that Telephone Industries of Pakistan was a private limited company working under administrative control of the Ministry of Information Technology.



The government of Pakistan has a 100% stake in the company with 896,193 ordinary shares of Rs1,000 each.

The challenges faced by the company include obsolete machinery and plants, an old skill base, intense competition in the telecom sector especially in vendor market and a heavy burden of labour. Its sales were only Rs20 million in financial year 2014-15.



Earlier, the Cabinet Committee on Privatization, in a meeting on October 3, 2013, approved the sell-off programme including the privatisation of Telephone Industries.

However, the company did not feature in the list of enterprises approved for early privatisation. As a result, the Ministry of Information Technology, while considering the deteriorating condition of the company, approached the Privatization Commission, asking it to initiate the sell-off process at the earliest.

Later, the company’s privatisation was discussed in a huddle chaired by Finance Minister Ishaq Dar on August 23, 2015.

In the meeting, it was suggested that approval of the Ministry of Defence should be sought before going for privatisation of Telephone Industries as it was located in an area surrounded by sensitive government installations.



The Ministry of Defence did not object to the privatisation from the security point of view, however, it showed its willingness to take over the company if some conditions were met.

The ministry asked the government to clear pension liabilities of the employees and bear one-year salary and other expenses for sustainability.

It also called for abolishing the trade union and meeting all other liabilities pertaining to government, bank customers, shareholders and employees.

The Cabinet Committee on Privatization was informed that the Ministry of Information Technology did not accept the terms of the defence ministry, therefore, the privatisation of Telephone Industries may be initiated.

Published in The Express Tribune, June 15^th, 2016.

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