KElectric is a good example of how privatization can actually help improve market efficiency, a webinar was told here on Monday.
After it was partially privatized over a decade ago, 70% of Karachi is free from loadshedding, and it has one of the lowest transmission and line losses of any power company in Pakistan.
The topic of the webinar, hosted by TV news anchor Adil Shahzeb, was “Is Privatization the Panacea to ridding the Pakistan Economy of its deadweight loss?”. Former energy minister Khurram Dastgir Khan, former chairman Board of Investment Haroon Sharif and researcher and intelligence analyst Aamir Mughal were panelists.
Host Adil Shahzeb said that the question to ask was whether privatization is the way forward and whether it can benefit the economy since many government-owned organizations like PIA and Pakistan Steel were losing billions every year. K-Electric was one example of how an entity performed better after it was privatized.
Former Energy Minister Khurram Dastgir said that these companies were a burden on the economy and that they were tolerated because they employed tens of thousands of people. However, he said, privatization is not the solution to every problem.
Former BOI chairman Haroon Sharif said that the more fundamental question that needed to be asked was whether the government should even run commercial entities. Khurram Dastgir said that if a corporation was to be privatized then it was the responsibility of the government to ensure that this doesn’t lead a monopoly in the private sector. In response to a question raised by the host, Khurram Dastgir said that Shanghai Electric had shown interest in buying it in the past but that was not the case anymore.
Aamir Mughal talks about the need of ‘public interest’ in these entities. He says there is a need to find a way in which the companies are not completely privatized but rather we find a middle ground.
Former Energy Minister Khurram Dastgir touched on the ongoing dispute of the K-Electric ownership. He said that the government ownership still remains the same. Talking about the ownership of the remaining shares, he said that this issue remains uncertain and ownership will be decided based on support from the government.
Former BOI Chairman Haroon Sharif said that what was needed was the utilization of competent individuals to run these companies and that this couldn’t be provided just by the government.
