PPPs, privatization key to Pakistan’s future economic growth

Muhammad Ali, Adviser to the Prime Minister on Privatization and Chairman of the Privatization Commission, said on Friday that public-private partnerships and asset sales are vital for addressing the country's coming economic and infrastructure demands, according to Mettis Global. Speaking at a national dialogue organised by the Asian Development Bank, he called for big investment, tighter management, skilled workers and innovation.

Projections cited at the event put Pakistan's population at around 390 million by 2050, up from about 230 million, which would lift urban infrastructure needs by roughly 100%. He noted a savings rate of around 14%, against 32% in Vietnam and 40% in China, as a reason public funds alone would fall short. Ali also said companies set up to earn returns should be run privately rather than depend on public money.

The PPP pipeline holds 38 projects worth about $6.5 billion, spanning highways, rail, hospitals, hotels, aviation and industrial estates, but Ali said it must grow considerably. The 27 privatization transactions in progress cover electricity distribution firms, airports, insurers and lenders. Pointing to the PIA deal, he said about Rs600 billion of legacy debt moved to the holding company. The Federal PPP Authority, known as P3A, is being folded into the Privatization Division to streamline PPP work.