‘Privatisation has served only vested interests’

Expert opposes privatisation of Pakistan Railways, Steel Mills.

FAISALABAD:

Privatisation of public-sector organisation in the country has served only vested interests at the cost of public welfare, Economist Khawaja Sarmad said on Tuesday.

He was delivering a lecture on Privatisation; Myths and Realities at the University of Agriculture Faisalabad.

He said privatisation of profit-making enterprises had been detrimental to the country’s economy.

Dr Sarmad, who has served as an economist with the International Monetary Fund, said some elements in the government were mulling over the privatisation of the Oil and Gas Development Corporation, a public enterprise which was contributing between Rs80 and Rs90 billion in profits to the national exchequer. The ODGCL’s annual profit was more than the federal budget for health and education.

He also rejected the impression that the privatisation of Pakistan Railways and Pakistan Steel Mills would do any good to the national economy. “With sound leadership both organisations can once again be made profitable,” he said.

Dr Sarmad said there had always been people in key government posts in Pakistan who had advocated privatisation of public enterprises in the name of debt retirement and poverty eradication. “Some of them have paved the way for privatisation of some companies by installing their stooges to key posts and fudging performance data,” he said.

He said whatever funds had been raised through privatisation were not spent on debt repayment or poverty eradication.

He said some $5.7 billion was earned through the privatisation of 167 public companies in a decade. Out of this, he said, $1.5 billion was later returned to the buyers on the pretext that initial price evaluation was more than the actual market price. Another $1.2 billon was adjusted for the spending on the formation of privatisation commission and advertisements. The rest was used to purchase 18 F-16 fighter jets.

Dr Sarmad said that in France many profitable companies were owned and run by the state.

He urged the participants to work towards ensuring that quality education was available to all.

Earlier, UAF Vice Chancellor Prof Iqrar Ahmad Khan said so far university faculty and doctorate students had earned more than 200 research projects worth Rs1667 million. He said UAF’s Centre of Advanced Studies in Agriculture and Food Security would soon start faculty and student exchange with universities in the US under a five year partnership programme worth $45 million it recently signed with the United States Agency for International Development.

Prof Khan said the university organised festivals and other events to ensure contact with the community around the year. These, he said, included a kissan mela, exhibitions, skill development programmes and internships.

Published in The Express Tribune, July 25^th, 2012.