Reducing bleeding by State-Owned Enterprises (SOEs)

 ▪ There is no instant gratification

▪ Lesson: Turnaround requires time, patience, and endurance

▪ Instead of a big bang hopium based approach, sustained efforts by an effective empowered leadership team is required, to manage the SOEs based on principle of working for profit and not being bailed out beyond 3 years.

▪ Although, privatization success stories in banking and of K-Electric have been a game changer, it is increasingly apparent and necessary to catalyse SOEs disinvestment under a P3P mode of implementation and by reviving PIDC.

▪ This disruptive approach of reviving PIDC is essential especially given our history of privatization being a long drawn process e.g disinvestment of HEC was in fifth attempt after 14 years!

▪ Shares of the 207 SOEs be placed under a “Revived PIDC”

▪ Each SOE be then placed into verticals (holding companies) e.g a) refinery, E&P, OMC, Gas, Coal; b) Power generation, DISCOs and transmission; c) Industry, Fertilizer, Minerals; Media and Communication; d) Logistics and Supply Chain; e) Services, Engineering, Conservation; f) Fund, Bank, Insurance etc.  

▪ The Foreign Investment (Promotion and Protection) Bill, 2022 be extended and applicable to “Revived PIDC” Board, Holding Company Verticals and their team across the hierarchy.

▪ This disruptive measure is necessary to manage commercial assets, hold government shareholding of SOEs, undertake aggressive transformation, consolidation of roles including reduction/merger of departments, companies; followed by undertaking strategic investments (lowering losses, infrastructure, energy conservation, developing regional footprint) and partnering with defence production industry to increase engineering exports and introducing products into the local market