Pakistan PM Orders Acceleration of State-Owned Enterprise Privatization
Prime Minister Shehbaz Sharif has directed officials to expedite the completion of Pakistan's privatization program, emphasizing adherence to agreed-upon timelines. During a meeting in Islamabad reviewing the privatization of state-owned enterprises, the Prime Minister stressed the importance of close coordination among relevant ministries and institutions to meet all program targets and deadlines. The meeting was attended by Deputy Prime Minister and Foreign Minister Senator Muhammad Ishaq Dar, along with several federal ministers and senior officials. A key focus was the privatization structure for Zarai Taraqiati Bank Limited (ZBTL), with the Prime Minister insisting that its core function of agricultural financing, particularly for small and medium-scale farmers, must be preserved post-privatization. He highlighted that improved access to financial resources for farmers is crucial for boosting agricultural productivity and supporting Pakistan's economic growth and food security. Officials reported that 27 state-owned enterprises are part of the three-phase privatization program. The financial closing and management control transfer for Pakistan International Airlines (PIA) and First Women Bank have been completed, with PIA's transfer occurring on June 29. Progress on the privatization of Islamabad Electric Supply Company (Iesco), Faisalabad Electric Supply Company (Fesco), and Gujranwala Electric Power Company (Gepco) was also reviewed. Expressions of interest have been advertised for these power distribution companies, with submission deadlines in August and September. International companies have shown interest, and investor roadshows are underway. These companies collectively serve over 14 million consumers, and investors can acquire 51% to 100% shareholding with management control. The Prime Minister also received updates on the ZTBL privatization, confirming the transaction structure is being designed to protect its agricultural lending mandate. Additionally, progress on privatizing Islamabad International Airport, Karachi's Jinnah International Airport, and Lahore's Allama Iqbal International Airport was discussed. Separately, Prime Minister Sharif directed officials to develop a roadmap for a private equity fund to promote investment, support SMEs, and encourage sustainable economic growth, emphasizing the need for alternative capital sources given the banking sector's limited role in investment financing.
The Pakistani government's push to privatize state-owned enterprises, including major utility companies and financial institutions, reflects a strategy to attract private capital and improve efficiency. The emphasis on maintaining ZTBL's agricultural financing role highlights a balancing act between commercialization and developmental objectives, acknowledging the sector's critical importance to the national economy. The simultaneous focus on establishing a private equity fund signals a broader ambition to deepen capital markets and foster investment across key sectors like mining, agriculture, and IT. This multi-pronged approach aims to address structural economic challenges by leveraging private sector dynamism, though successful implementation will depend on regulatory frameworks, investor confidence, and the capacity to manage complex transactions effectively within the stipulated timelines.
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