March 12, 2013 Leave a comment
Islamabad, MTT News Desk: The Pakistan Economy Watch (PEW) on Sunday said mounting losses in the politically managed Public Sector Enterprises (PSEs) are pushing country towards bankruptcy.
Living on hefty bailout packages, not a single PSE has contributed anything but sheer disappointments over the decades, it said.
These companies being run by the non-professional and politically motivated managers have become hub of favouritism and corruption with little hope for revival, said Dr. Murtaza Mughal, President PEW.
Governments use PSEs as a job creation tool to seek political mileage that in turn add to the losses in form of massive loans to pay salaries to an army of incompetent employees, he added.
He said that Pakistan International Airlines, marred with bad governance and misadministration, recently received Rs100 billion as bailout package while it has wasted around Rs 200 billion in last five years.
Estimates suggest that PSEs are wasting around 15 per cent of the total governments revenue which should be tackled immediately as collections have been sliding down since years.
Dr. Murtaza Mughal said that PSEs including PR, PSM, NHA, PEPCO, PASSCO, TCP, USC, receive over Rs300 billion as bailout packages annually with no improvement and continued wastage of fiscal resources which could have been used for bettering public services.
It can help government boost spending on critical sectors like health and education, he added.
Sometimes worst-run PSEs borrow more than what entire private sector of the country borrows from banks but they still make losses to the tune of billions while taxpayers money is used to keep them alive.
All the finance ministers of the incumbent government including Shaukat Tarin, Naveed Qamar, Abdul Hafeez Shaikh and Saleem Mandviwalla have failed to chalk out an effective strategy to turnaround the PSEs, said Dr. Mughal.
He said privatization of some PSEs might improve situation.