Privatizing Some State-Owned Enterprises Chapter 14: Privatizing Some State-Owned Enterprises The process of privatization has slowed down visibly during the tenure of the present Government. It has not been able to articulate a clear policy on which units should be privatized and which should not. Initially, it was proposed that a Fund be established which would focus on the restructuring of State-Owned Enterprises(SOEs) and privatization would generally not be resorted to. But such a Fund has not been set up yet. The objective of this Chapter is to describe the SOEs as they exist today in the aftermath of different rounds of privatization since 1991. This is followed by quantification of the financial burden placed by the SOEs on the Government Budget. The last section identifies potential candidates for privatization based on the application of a consistent and relevant set of criteria. 14.1. The SOEs There are currently 204 SOEs in Pakistan. 138 of these are commercial companies and 48 are non-commercial companies. There are 8 Development Finance Institutions(DFIs) and 10 Federal Authorities. 41 of the SOEs are in the energy sector, 35 in the transport sector, 33 in financial services, 46 play a promotional and advocacy rule and the rest are in different sectors of the economy. The total assets of SOEs aggregated to Rs 17114 billion as of the end of 2017. Over the three years since 2014, there was a sizable increase in assets of 49 percent. The total revenues were Rs 3482 billion in 2017, with a decline of 34 percent after 2014. The top 10 profit making SOEs and the top 10 loss making SOEs are listed in Table 14.1. Table 14.1: Top 10 Profit Making SOEs and Top 10 Loss Making SOEs Profit Making SOEs Profit – (Rs in Billion) Loss Making SOEs 1. OGDC 63.8 1. NHA 2. PPL 35.7 2. Pakistan Railway 3. GHPL 20.3 3. PIA 4. PARCO 19.1 4. LESCO Loss – (Rs in Billion) -133.4 -40.7 -39.6 -37.4 139