ISLAMABAD: The federal government’s privatisation programme has suffered a major slowdown, with authorities failing to achieve the targets set for the first phase of the five-year plan.
According to available details, the government had set an ambitious target of privatising 10 state-owned entities during the first year of the programme. However, even after two years, only two institutions have been successfully privatised.
The government has so far managed to complete the privatisation of First Women Bank Limited (FWBL) and Pakistan International Airlines (PIA), falling significantly short of the original target.
The slow progress represents a setback for the federal government’s broader economic reform agenda, which places privatisation at the centre of efforts to reduce the financial burden of loss-making state-owned enterprises and improve the efficiency of public-sector institutions.
Five-Year Privatisation Plan
The federal government approved its five-year privatisation programme for 2024–2029 in August 2024.
Under the initial plan, the government identified 24 state-owned entities for privatisation, with the process divided into three phases.
The first phase was designed to move relatively quickly, with 10 entities selected for privatisation within the first year. However, the government has been unable to maintain the pace envisaged in the original schedule.
After two years, the completion of only two transactions means that a substantial portion of the first-phase target remains pending.
The delay has raised concerns about the government’s ability to implement its wider privatisation strategy within the five-year timeframe.
Economic Reform Programme Faces Setback
Privatisation has been presented as an important component of the government’s economic reform efforts. The objective is to reduce the financial burden of state-owned enterprises on the national exchequer, improve management and attract private investment.
However, the slow pace of implementation could make it more difficult for the government to achieve these objectives.
The government’s inability to complete the targeted number of transactions has also highlighted challenges associated with the privatisation process, including legal, administrative and financial issues surrounding state-owned entities.
The successful completion of the PIA and First Women Bank transactions demonstrates that privatisation deals can move forward, but the much lower-than-planned number of completed transactions indicates that the overall programme remains behind schedule.
24 Entities Selected in Three Phases
The five-year programme envisages the privatisation of 24 entities through three phases. The selection was part of the government’s strategy to gradually reduce the state’s role in commercial activities and restructure its portfolio of public-sector enterprises.
The first phase was expected to establish momentum for the programme. Instead, the limited number of completed transactions has created uncertainty over whether the remaining targets can be achieved within the announced timeframe.
With two years of the five-year programme already passing, the government will now face pressure to accelerate the process if it wants to meet the targets set for the remaining years.
The slowdown could also have implications for Pakistan’s broader fiscal reform efforts, particularly as the government continues to face pressure to reduce expenditure and limit losses arising from inefficient state-owned enterprises.
The federal government is therefore expected to review the progress of the privatisation programme and take measures to speed up pending transactions.
For now, the figures indicate a significant gap between the government’s original privatisation ambitions and actual progress, with only two of the 10 entities targeted in the first phase having been privatised despite two years having passed.
About The Author
