Creating awareness: Lots to show for Rs285m, but not in work

Privatisation Commission spends on publicity blitz five times the size of its budget.

ISLAMABAD: The Privatisation Commission has spent Rs285 million on its publicity campaign over the past 17 months, which is five times the size of its entire budget for the current year, The Express Tribune has learnt.

Sources within the commission said this expense had been incurred since August 2009, with the monthly average coming to Rs17.8 million.

The expenditure had been made under the pretext of an advertising campaign for the Benazir Employees Stock Option Scheme (Besos), city branding and a flood relief campaign. A part of this amount was used for Besos publicity but most of it was spent on the campaign related to floods.

Railways Minister Ghulam Ahmad Bilour aptly remarked that the money spent on publicity could have bought the Railways nine locomotives as the cost of manufacturing one engine is Rs30 million.

The money belongs to the Privatisation Fund, which is pooled by deducting two per cent of the proceeds from privatising public sector entities. This fund can only be utilised to meet expenses specific to the privatisation process. Since 1991, Pakistan has privatised 167 entities worth Rs476.5 billion.

Senior officials from the Privatisation Commission confirmed that Rs285 million had been spent but none of them was willing to speak on record due to a possible  “backlash from certain quarters”. They all said that the management was in a fix over how to deal with the issue. However, one of the officials said that the Besos campaign did fall under privatisation-specific spending.

Sources said that the commission had initially gotten approval from the privatisation board to utilise up to Rs250 million on the basis that the finance ministry will reimburse the money. However, a senior official of the commission said on condition of anonymity that the finance ministry is not ready to fully reimburse the amount. Officials from the ministry were, however, hesitant to respond.

In the commission’s board meeting on December 22, the commission also managed to get ex-post facto approval of Rs35 million spent in excess of the board’s approved ceiling.

What’s it worth?

The Privatisation Commission has been under criticism for not initiating the privatisation process. Senator Waqar Ahmad, who was appointed privatisation minister on December 16, 2009, is also yet to make his mark.

For this financial year, the government had allocated Rs56.5 million to the commission but, surprisingly, there is no sell-off target. Its proceeds target was Rs19 billion, but the commission failed to fetch a single penny on account of privatisation during the financial year ending June 30.

This is the third consecutive financial year when the Privatisation Commission has failed to justify its existence. During this period, it has been allocated a total of over Rs160 million to meet its running expenses. The commission has also not been able to solve the issue of the 800$ million dues from the privatisation of Pakistan Telecommunication Company Limited (PTCL). Dubai-based Etisalat bought 26 per cent of PTCL’s shares with management control but has withheld payment. The company had paid the third instalment of $133.3 million in 2008.

Due to the management’s objection, the privatisation minister’s attempts to make a documentary on privatisation at a cost of Rs50 million remained futile, sources added.

At a time when the ministry is unable to perform its own job, the privatisation minister tried to intrude in the operations of the ministry of industries and production. In the last board meeting, the commission tried to bag the mandate to restructure Pakistan Steel Mills, which is the industries ministry’s job.

Published in The Express Tribune, December 28^th, 2010.