ISLAMABAD - The government would suffer the revenue loss of Rs 47.5 billion, estimated under privatisation proceeds, during the ongoing financial year as the privatisation of ailing public sector entities (PSEs) have been put on hold due to political opposition and widespread labour unrest

The government, in budget 2015-2016, had estimated to generate Rs 50 billion from the privatisation during the current fiscal year. But, it could only privatise National Power Construction Corporation (NPCC) at a cost of Rs 2.5 billion. The government could not complete the privatisation of many PSEs due to strong opposition from the political parties as well as labour unions.

The privatisation of Pakistan International Airlines (PIA), Pakistan Steel Mills (PSM), Faisalabad Electric Supply Company (Fesco), Lahore Electricity Supply Company (Lesco) and Islamabad Electricity Supply Company (Iesco) could not materialised on time, as had been committed with the IMF. Pakistan has already sought additional time from the International Monetary Fund (IMF) for the privatisation of PIA, which cannot be done by the end of June 2016.

Sources in the Ministry of Finance informed The Nation, the government would either slash PSDP or resort to bank borrowing to meet the deficit occurred due to failure in privatising PSEs.

“I think the government will reduce the PSDP to meet the budget deficit target,” said an official of the Ministry of Finance.

He further said that privatisation of PSEs like PIA and PSM would make progress in the next financial year.

The IMF, in its latest review of Pakistan’s economy, has stated that plans to privatise the power distribution companies (Discos) have also been put on backburner, and the authorities will not be able to complete the bidding process for FESCO by June 2016.

The Fund also noted with concern significant delays in the planned sale of Pakistan Steel Mills (PSM) and PIA.

The parliament, in a joint sitting, had unanimously approved the Pakistan International Airlines Corporation Conversion Act last month, which would pave way for the airlines’ privatisation.

Sources also informed this scribe that government had already decided to shelve the privatisation of DISCOs. “We are in the process of revisiting our strategy for DISCOs and we will continue to engage with key stakeholders to build a consensus.

In the meantime, we will strengthen our efforts to improve DISCOs’ performance and reduce the financial losses,” Pakistan has reportedly told the IMF.

Meanwhile, privatisation of Northern Power Generation Company Limited (NPGCL), Jamshoro Power Generation Company Limited (JPCL), Lakhra Power Generation Company Limited (LPGCL) and Central Power Generation Company Limited (CPGCL), Kot Addu Power Company (KAPCO) and Small & Medium Enterprise (SME) Bank are in the pipeline.

The PML-N government had set in motion the privatisation process of 68 public sector entities after assuming power in June 2013.

It privatised profit-making public sector entities, including Habib Bank Limited (HBL), United Bank Limited (UBL), Allied Bank Limited (ABL), Pakistan Petroleum Limited (PPL) and National Power Construction Company.

The government had generated Rs 177 billion through privatisation during the previous fiscal year 2014-2015.

Minister of State for Privatisation Mohammad Zubair was not available for his comments on the story.