Federal Minister for Industries and Production Mr.
Liaquat Ali Khan Jatoi while briefing the Press in Islamabad on improved
performance of the Public Sector Corporations during the outgoing
financial year disclosed that his ministry has planned various projects
for expansion and modernization for these corporations and subordinate
departments to make them more viable and profitable.
The Minister gave facts and figures which proved
beyond doubt that the performance of these corporations has been much
better this year than in the past. But at the same, one cannot ignore
the fact that this improvement has only helped to reduce the operational
losses and not made them profitable. The improvement in the public
sector's performance last year is undoubtedly an encouraging feature
which in the long run may contribute to meaningful progress in the
process of privatization with the possibility of better prices for the
shares of these corporations in open bidding. The rationale for making
heavy investments on the proposed expansion and modernization plan is,
however, questionable. The Minister told newsmen that all corporations
include National Fertilizer Corporation, Pakistan Steel Mills
Corporation, Pakistan Automobile Corporation, State Engineering
Corporation, Utility Store Corporation have planned expansion of their
units, replacement of old machinery with new and training of technical
knowhow keeping in view to secure maximum share in the market in their
He said that Development of Chemical Vision and
Industrial Policy for Pesticide, Industrial Investment in Pakistan and
Booklet on 'Physical Infrastructure in Pakistan' is under preparation by
Expert Advisory Cell of the Ministry.
Giving the performance of the corporations of 2002-03
under the Ministry, he said during the year, production index of all
corporations, including their units, showed an increase of 8 per cent
last year. Net sales of industrial units under corporations registered
an increase of Rs.8.10 billion (32 per cent) (from Rs.25.6 billion last
year to Rs.33.7 billion in 2002-03). Pre-tax profit for the year 2002-03
increased to Rs.1,265 million against Rs.292 million in previous year
(an increase of Rs.973 million, which is 333 per cent).Taxes and duties
paid to the government during 2002-03 showed an increase of Rs.2.35
billion (37 per cent).
The sale of PS increased 8.7 billion 2002-03 largely
due to rise in volume. The sale of PS during 2002-03 was Rs.23 billion
as compared to Rs.14.2 billion in 2001-02. It also showed an increase in
the pre-tax profit of PS by Rs.871 million in 2002-03 as compared to
last year, he added.
During 2002-03, investment attracted by Karachi EPZ
increased to $16 million (107 per cent) over previous year). Exports
increased to $129 million during the year against $ 100 million through
EPZA showing an increase of $29 million. EPZA developed two new zones at
Sialkot and Risalpur. In Risalpur EPZ, 34 projects proposals worth $16
million were approved and two units started production. In Sialkot EPZ
so far, 171 projects stood sanctioned with envisaged investment of $132
The government has planned 19 more zones in different
cities of the country, which are under different stages of completion of
Phase-II and Phase-III, he added. Jatoi said that SMEDA facilitated
3,100 SMEs in different sectors during the year. Moreover, 8,300 people
were trained under different training Programmes/Seminars and Workshops.
According to the Minister following are the future
projects which his ministry intends to initiate. Ministry of Industries
has proposed for setting up of Marine Fish Processing Research and
Training Institute at Gwadar with collaboration of government of Japan
at a cost of Rs.377.4315 million.
A project for upgradation of Automotive Testing and
Training Centre, Karachi is under process at cost of Rs.298 million. The
centre will provide testing and calibration services to the auto
industry, to disseminate the latest technological knowhow and providing
National Fertilizer Corporation of Pakistan (Pvt) Ltd
(NFC) Pak-American Fertilizer has been awarded ISO-9001 quality standard
certificate and Pak Arab is likely to get this within current
month.Upgradation of Plastic Technology Centre (PTC) Karachi in
collaboration with JICA is underway at a cost of Rs.396 million and will
be completed by 2005.
The Ministry for Industries and Production also paid
visit to SEL and directed to replace the old machinery with new. The
machinery has been replaced. Sindh Engineering (Pvt) Ltd. (SEL) entered
into Joint Venture Project with Dong Feng Motor Company, which started
on July 20, 2003 whereas commercial production will start in second week
of August 2003. By January 2004, the activities will expand when 15 ton
and above capacity trucks and buses would be produced by SEL. An
important and attractive feature of DFM operations is that when SEL will
achieve sales figure of 1000 vehicles in a year, it will form into a
joint venture with Dong Feng Motor Corporation. In the first year, it is
expected to fetch sale of 2,000 vehicles.Pakistan Industrial Development
Corporation (PIDC) signed MoU with a Saudi Group (Kane Kanooz Al Watan)
for development of Modern International Cluster Park in Karachi.
Following projects are directed to be setup in near
future: Revival plan of Huraai Woolen Mills and Bolan Textile Mills and
Lasbella Textile Mills, Utthal is underway.Plan for setting up of Fruits
Research Centre on the land of Talpur Textile Mill.Plan for setting up
of an IT Park in Karachi. PIDC to join hands with EPB for setting up of
value added industries for SMEs sector.
New Joint Venture project identified are:
FISH AND SHRIMP PROCESSING PROJECT AT KORANGI FISH
PURE VACUUM DRIED (PVD) SALT PROJECT, HUB INDUSTRIAL
PU COATED LEATHER PROJECT, KARACHI.
MANGO PULPING PLANT, HYDERABAD, SINDH.
MARBLE AND GRINITE PROJECT, NWFP.
APPLE AND DATES PROCESSING PROJECTS.
HEAVY MECHANICAL COMPLEX.
Efforts to secure business for the manufacturing of
thermal power plants are being made under the new Power Policy.MHC has
pre-qualified for two packages of Malakand-III Hydroelectric Power Plant
while offers have been submitted to Sarhad Hyderabad Development
Contract awarded to HMC by HIT for manufacturing of
Turret and Hull of Al-Zarrat Tanks.For setting up of Sugar Mill in
Afghanistan of 3,000 tons capacity valuing $19.41 million. Agreement has
been signed between HMC and M/s Fazal Rahim Group of Afghanistan.
Expansion of Pakistan Steel's capacity from 1.1
million tons per year to 1.5 millions tone in the First Phase with
Russian collaboration is underway.
UTILITY STORES CORPORATION OF PAKISTAN (USC)
Rehabilitation plan of the Utility Store on modern
lines is under way. Expansion of USC is also underway in the areas where
common man benefited at maximum under the policy of the government. The
scope of granding/packing of utility brand has been expanded to include
PAKISTAN INDUSTRIAL TECHNICAL ASSISTANCE CENTRE (PITAC)
Balancing and Modernization of Workshop facilities at
PITAC, Lahore in collaboration with JICA at a cost of Rs.736.35 million
and will be completed in 2006.Modernization and upgradation of PITAC
(metal processing and development centre) Lahore at a cost of Rs.284
million and would be completed by 2005.Establishment of PITAC Regional
and Zonal Industrial Technology Support Centres Phase-II (26 projects)
in major industrial cities of Pakistan and AJK at a cost Rs.4514 million
and completion period is 36 months.
Notwithstanding the better performance of the public
sector corporations, their privatization and transfer of
ownership/management control to the private buyers is the ultimate
objective under the declared official policy. The minister's reference
to fresh investment by some of these units for the purpose of
modernization and expansion in manufacturing facilities, may be
interpreted as a laudable effort to use the surplus resources of these
units for the improvement of their working efficiency and financial
viability. It may be assumed that this exercise will not create
additional demand on the federal government's budgetary resources.
Otherwise the so-called programme for modernization and expansion of
these units must be avoided. The objective of privatization is to
recover the resources of the federal government, which are tied to the
capital base of the public sector corporations because the government
cannot afford to continue manufacturing and trading activity for several
reasons. Secondly, the management efficiency of the public sector
enterprises is always low due to lack of responsible behaviour on the
part of the bureaucracy.
The government is already subsidizing the losses of
public sector to the extent of Rs.100 billion annually which is one of
the major causes of inadequacy of budgetary resources to pay attention
to financing of social sector development to a significant extent. For
these and other valid reasons, the public sector participation in
trading and industrial activity has now been decisively brought to an
end in almost all the countries of the world. In this context, it may be
expected that the proposed plans of modernization and expansions in
public sector industries would not be designed to extend and prolong the
state ownership/management. The earlier the divestment of government's
shareholdings is completed through the process of privatization, the
better it will be for the soundness of the budgetary position of the