Re: Bhutto’s Nationalization policy
While the banks of the country posted healthy profits in 2011 let us see the status of the corporations currently being run by the government.
Wapda currently has circular debt of 370 billion and its increasing to the tune of 15-20 billion per month.
Pakistan Railways suffered 52 billion lossbetween 2008 and 2011.
PIA’s losses have swelled to92 billion.
Pakistan Steel Mills have suffered losses of 71.4 billion during the past four years.
**ISLAMABAD: ****Five public sector enterprises are either operating without a governing board, or are run by unskilled persons. In the latter case, retired or serving bureaucrats, or unqualified but politically well-connected individuals, have been appointed to run these enterprises. According to sources, these entities have collectively caused Rs393 billion in losses to the national exchequer during four years of the Pakistan Peoples Party government.
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These entities include Pakistan Railways (PR), Pakistan International Airlines (PIA), Pakistan Steel Mills (PSM), Pakistan Agriculture Storage and Services Corporation (Passco), and the National Highway Authority (NHA).
Furthermore, losses incurred by Pepco due to subsidies– estimated at Rs1.2 trillion by the finance ministry – are not included in this assessment.
Measures like the establishment of the Cabinet Committee on Restructuring (CCOR), headed by Finance Minister Dr Abdul Hafeez Shaikh, failed to achieve lasting improvements in these corporations.
A special wing of the finance ministry – the Economic Reforms Unit – also failed to effect any positive change in these loss-making corporations.
**National Highway Authority
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The entity recorded Rs150 billion in losses during the four years under review – the highest among the five. When the PPP took over the government, the NHA recorded annual losses of Rs30 billion. These surged to Rs33.5 billion in 2008, Rs35.3 billion in 2009, Rs44.4 billion in 2010 and Rs36.5 billion in the last fiscal year, according to the official report.
**Pakistan International Airlines
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The national flag-carrier’s accumulative financial losses in three years and nine months stood at Rs81 billion. In 2007, the entity’s annual losses had been registered at Rs13.4 billion. These surged to Rs36.1 billion in 2008, Rs4.9 billion in 2009, Rs20.8 billion in 2010 and Rs 19.3 billion losses in nine months of last year.
PIA stands out as a bad case in nepotism. Minister for Defence Ahmad Mukhtar is chairman of the board, and the government recently appointed retired Air Marshal Rao Qamar Suleman as the new managing director. The four directors of the board are qualified with, at most, a bachelor’s degree. Malik Nazir Ahmad has a Bachelor of Arts (BA) degree; he was appointed in March 2008. Javed Akhtar and Makhdoom Syed Ahmad Mahmood also hold a bachelor’s degree. The latter is a Member of the Punjab Assembly, and his profile reads that “he has extensively travelled abroad”. Syed Yousaf Waqar has a bachelor’s degree in business administration. Secretary Finance Abdul Wajid Rana is also a member of the board.
**Pakistan Steel Mills
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From 2009 to 2011, PSM’s accumulated losses stood at Rs49.5 billion. The country’s largest industrial unit was in profit up to 2008, but political appointments have led to the near collapse of the behemoth. In 2009, it suffered Rs26.5 billion in losses; the figure came down to Rs11.5 billion in 2010, and was ‘sustained’ at this level in 2011.
Out of the members of the board, five are either serving or retired bureaucrats. The chairman of the board, Fazalullah Qureshi, is a retired federal secretary. Two members of the board are owners of steel mills. Mahreen Razaque Bhutto, an MNA on a PPP ticket, is also a member of the Board.
**Pakistan Railways
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PR incurred Rs96 billion in losses during the reviewed period. Before the government took over, its annual losses stood at Rs15.2 billion. This figure ballooned to Rs16.9 billion in 2008, Rs23 billion in 2009, Rs25 billion in 2010 and Rs31.1 billion during the last fiscal year. The government has only recently constituted a board of directors for the entity.
**PASSCO
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Passco recorded Rs34.6 billion in losses during the reviewed period. During the last year of the Musharraf government, Passco suffered Rs2.5 billion losses. The figure swelled to Rs3.4 billion in 2008, Rs3.3 billion in 2009, Rs 13.8 billion in 2010 and Rs14.1 billion in 2011.
A serving Federal Secretary, Shafqat Hussain Nagmi, is chairman of the Passco board; while a serving Major General, Shohail Shafqat, is the managing director of the entity. Three bankers are also members of the board.
Published in The Express Tribune, April 24[SUP]th[/SUP], 2012.