Tag Archives: Passco

Pakistan is near to declare bankruptcy

Rs100 crore a day

By Dr Farrukh Saleem

Pakistan’s Public Sector Enterprises (PSEs) are falling like nine pins. The Pakistan Railways, the Pakistan International Airlines, the Pakistan Steel Mills, the Pakistan Electric Power Company (Pepco), the Pakistan Agricultural Storage and Services Corporation (Passco) and the Utility Stores Corporation (USC) collectively end up loosing Rs360 billion a year – Rs100 crore a day every day of the year. That’s a hundred crore the government does not have – so it begs, borrows, steals and prints.

Currently, Nadeem Khan Yousufzai, MD PIA, is managing to lose Rs7 crore a day every day of the year. Haji Ghulam Ahmad Bilour, Federal Minister of Railways, is managing to lose Rs5 crore a day every day of the year. PIA’s half yearly report titled “Flying towards a prosperous future” reports that liabilities went up from Rs62 billion in 2005 to Rs200 billion in 2009. PIA’s annual report titled “We stand for national values” reports that net losses at the PIA have gone up from Rs4.4 billion in 2005 to Rs35 billion in 2008. At the Pakistan Railways, the overdraft now floats around a hefty Rs48 billion.

In mid-2009, the Pepco’s circular debt had reached a colossal Rs300 billion and that’s when the Government of Pakistan gave birth to another illegitimate dragon – Power Holding Company. The new dragon took over all of the Pepco’s sins by borrowing heavily from the banking sector but within two years of that take-over the Pepco committed 300 billion additional sins. And now the banks have not much left to lend.

The power sector debt – Rs485 billion and rising fast – just by itself has the potential of landing Pakistan’s entire banking sector into the gutter. Loosing Rs100 crore a day every day of the year will land the government into a ditch deeper than the government has ever been in.

We desperately need a Public Sector Turnaround Strategy (PSTS) without which our very survival as an effective nation-state is at stake. Our survival is at stake and yet our decision-makers are all about political rallies. I was once told that politics is the second oldest profession but the way our politicians are practicing politics it bears a close resemblance to the first. ….

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