Business leaders called for restructuring of ‘loss-making’ and ‘loss-showing’ enterprises – owned by the state – to control heavy loss to the national exchequer and for saving precious foreign exchange.
In a joint statement, Lahore Chamber of Commerce and Industry President Kashif Anwar, Zafar Mahmood Chaudhry and Adnan Khalid Butt said that the government should take measures on war footing to make these ‘loss-making’ organizations profitable or go for the option of privatization.
The Lahore Chamber’s president particularly mentioned the Pakistan Steel Mills – the first and only integrated iron and steel making complex with a rated capacity of 1.1 million tons. He said that this organization was a major source of steel products supply to the domestic industries.
Due to closure of the Pakistan Steel Mills, “our domestic industry is relying on import of raw materials,” he said, adding that huge foreign exchange was being spent on imports. He said that revival of the Pakistan Steel Mills should be top priority of the government, and policymakers.
During Question Hour, Parliamentary Secretary for Industries Shahida Rehmani apprised the National Assembly that the government had decided to privatize the Pakistan Steel Mills, as the privatization process was pending since 2015. She said that the privatization process was now at the advance stage.
She said that some 5282 employees of the Pakistan Steel Mills have been retrenched on the directives of the Supreme Court. She also said that salary bill had also come down from Rs350 million per month to around 100 million. From its own funds, the Pakistan Steel Mills had paid off long outstanding liabilities for an amount of Rs3.714 billion belonging to creditors, banks etc, she said.
Business leaders urge govt to lay down a clear plan about restructuring of state-owned enterprises
The business leaders said that the outstanding domestic debt and liabilities of the state-owned enterprises stood at Rs 1,972 billion in December 2022. The losses of these enterprises result in misallocation of taxpayers’ money and reduce the fiscal space for social sector development. They urged the government to lay down a clear plan about restructuring of the state-owned enterprises.
Every year, they said a considerable amount from taxes collected from the business community has to be allocated by the government to fulfill the debt obligations of the ‘loss-making’ enterprises, which can otherwise be utilized for constructive development activities. In the advanced economies, “role of the state-owned enterprises is minimal,” they said.
They said the private sector was the most important instrument of socio-economic prosperity in the developed countries, and there was continued growth of privately-run corporations. They said significance of the state-owned enterprises cannot be ignored as these remain the most employment-intensive and capital-intensive organizations.
Business leaders suggest committee to revisit strategy and adopt methods to provide a new impetus to state owned enterprises
They suggested formation of a committee of experts from public and private sectors to revisit strategy and adopt methods which provide a new impetus to the state-owned enterprises. They said the committee should go deep into the broader political philosophy and vision under which these enterprises can play their role in the competitive environment.
The business leaders said that the state-owned enterprises should continue to remain the backbone of the economy and therefore their revival was critical to the economic survival. They said that it was necessary for the government to increase its efforts for revival of the state-owned enterprises. They said that greater autonomy and non-interference in their functioning have to be guaranteed.
They said that the state-owned enterprises were not only industries for short-term economic and commercial gains but were the national assets. They urged the government to take immediate measures for restructuring of loss-making enterprises. The LCCI president said that the Pakistan International Airline was in dire need of new blood and additional aircraft could be possible with special efforts.
He said that cut in political interference, training of staff members and cost-cutting measures could control the losses of the airline and streamlining of flight operations will lead to sustainable revenues to the national flag career. He called for a salvage plan for a Pakistan Railways, saying that the Indian Railways was earning billions of dollars for the economy while situation in Pakistan was otherwise.