The government's track record on privatization has been very poor whether under the present government or its predecessors. The losing enterprises are still with us and will continue to be with us because there is nothing to be gained either by the sellers or the buyers.

Most of the units sold have resulted in the transfer of assets without getting the price in full. The new buyers have shut the operations and run off after making money by selling real estate.

Zeal Pak Cement, which provided jobs to the people in that area, is an example. Losing concerns like Wapda and the KESC are nowhere near privatization because there are no benefits to the sellers or the buyers unless their huge losses are made up by the exchequer as in the case of the UBL and the HBL.

Allegations of kickbacks are widely believed. Our assets are being sold at throwaway prices after sinking taxpayer's money as in the case of two banks. About two years back they privatized an oil well of the OGDCL at a price which is equal to one and a half years oil production.

Taking the case of the PTCL, 12 per cent of its shares were sold to the public, including foreign buyers at a very high premium ten years ago. Neither have we been able to attract a potential buyer for the PTCL nor has the share value appreciated very much. On the other hand, the PTCL has been revising its tariff suiting its convenience without taking into consideration the plight of the subscribers and making huge profits in the bargain.

To hasten the process of the PTCL privatization they engaged the Morgan Grenfell as financial adviser in Aug 1995, for its re-structuring and sale of 26 per cent of the equity to a strategic buyer at a total cap of $2.75 million for the retainer fees and $0.75 million for expenses.

The task was to be completed in nine months. After going through the exercise in Nov 1997 Deutsche Morgan Grenfell financial advisers of the PTCL very clearly told the Privatization Commission (PC) that no major telecom company is prepared to acquire the stake.

The advisors also recommended transfer of the ownership from the ministry of communications to ministry of finance/PC. Their recommendations fell on deaf years and their contract was terminated after negotiated settlement.

The PTCL's strategic sale has been in the marketing phase since 1996. This was the period when Mr. Nasim Mirza was brought in as its chairman by the then government with the task of privatizing it in two years.

He stayed for four years without acheiving the objective. It was during his time that the PTCL lost its credibility when foreign shareholders were denied the profits on the excuse that they held vouchers and not the shares, as it was the PTCL's responsibility to convert these vouchers into shares.

Apart from this, share-holders were not informed what assets would be transferred to the newly created National Telecommunication Corporation which was to take over all the lines of the armed forces and other government departments.

This created panic amongst shareholders abroad that had purchased these shares at Rs55 a share. As the prices crashed, most of the shares were sold out in panic. Now a share is selling at Rs39 not a big deal because Rs10 share was sold at Rs30 and when the index of Karachi Stock Exchange has touched 5050 and created an all-time record, the PTCL shares are still floating between Rs39 and Rs40.

The PTCL is a very high value asset-virtually a gold mine for Pakistan. Perhaps this was at the back of mind of Minister for Privatization Dr Abdul Hafeez when he said that we want to avoid the situation when we have a public monopoly going in the hands of the private sector.

According to latest balance-sheet, the PTCL's total revenue for the period ending December 31st 2003 stood at Rs37.10 billion, an increase of Rs4.18 billion over previous year, this is in spite of reduction in new telephone connections, monthly line rent, international outgoing calls and NWD charges.

The position of revenue could have been much better if the good sense had prevailed in early years when the PTCL was advised to cut down tariff. Due to lack of foresight and bad planning, the PTCL lost billions of rupees by not entering into cellular business.

The tragedy is that they allowed their entire infrastructure to be used by the cellular companies; they woke up when it was too late. The PTA role has been disappointing as a regulator authority. The four cellular companies have done extremely well but contravened the agreement by not catering the needs of rural areas.

The concentration has mainly been on major cities of Pakistan .It is anticipated that within the next three to four years cellular telecom sector will have 100 per cent growth. Existing four cellular companies, U fone, Mobilink, Instaphone and Paktel have around 3.3 million subscribers. Mobilink being the largest with 2.2 million subscribers is planning to increase its base to 5 million and so is the case with U fone and other companies.

What was the wisdom in inviting more cellular companies when the existing companies had the potential to meet the growing needs of the people? Even in most advanced countries of the world the number of cell companies is less than in Pakistan.

It is surprising to note that on one hand, the PTCL is being planned to be privatized on the other hand millions of rupees are being spent on expansion. This is absolutely ridiculous on the part of higher management. It is being done to get more prices this is a wrong perception because the prospective buyers have already determined its price.

The question arises why the PTCL has not come up to the expectations of the people. The truth of the matter is that it was due to unnecessary political interference from the ministry and the ill-disciplined CBA has been the main cause of their failure.

The problem with PTCL has been that it is overwhelmed with inefficiency and that short of immediate restructuring, including manpower audit based on corporate ethics and proper commercialization, it would continue it's downhill slide. This is a unique organization where people contribute over Rs 11 billion per year without even lifting the handset only to approach the Wafaqi Mohtasib for their complaints.

The remedy does not lie in privatization but making it more people-friendly.

Following are some the measures suggested:

a. 64000 employees are worried about their future. A state of uncertainty is prevailing in the ranks, which is detrimental to the interest of the company. The existing manpower has given its best efforts to the company; if there were failures these were because of their resolve but unnecessary interference from the ministry and the PTCL HQ. There is immediate need to restore the confidence of the entire workforce.

b. The Ministry should allow the PTCL to work independently.

c. Business rules must be changed without further delay. The NTC carved out of PTCL is doing much better than PTCL why can't PTCL produce better results.

d. Decentralization is the need of the hour. Powers must be delegated at regional level for better output and quick results.

e. Finance should be separated from technical management and placed under respective EVPs. and they should be allowed free hands to carry out business independently.

f. Centralized procurement should be stopped; it only adds to delays in implementing various projects.

g. Corporate culture should be introduced not on paper but should be visible on the ground.

h. Regional EVPs should be given full powers to tackle any situation. Undue interference from the PTCL HQ must end. Only pre qualifications and specifications should remain the domain of PTCL HQ; the rest should be left to the field managers.

i. Karachi, which generates maximum revenue, is badly planned. PTCL cable is frequently damaged by other utilities. There is need to revert to radio connectivity.

j. Timely decision is always lacking. Around 340 customers are waiting for over two years for Digital Cross Connect in Karachi alone.

This is self-created loss to PTCL by not meeting the requirements. PTCL had the potential to airlift any equipment and install in a given time why this delay?

k. The success of our higher management at PTCL HQ and deployed in the field has been revolving in obeying illegal orders as a result some officers were nabbed by the NAB. This practice must be brought to an end.

l. All systems must have redundancy if you have no spares the downtime increases that mean loss of revenue.

m. Even today the kingpin is the head clerk. There is immediate need to computerize the entire network and it should be available on CD, because corruption starts from head clerk.

n. PTCL needs to establish independent sales and marketing division, which has been non-existent and it should have nothing to do with the networking. Networking staff should only ensure 100 percent operational readiness of the equipment.

o. Harassment should be the last tool in the hands of the FF management give time to officers to improve but without interference.

p. Provision of latest vehicles fitted with tools and proper gadgets must be provided in all the regions for quick laying and rectification of faults.

How much of sales proceeds from the privatization of PTCL can help reduce the debt burden is a million dollar question. The sale proceeds of PTCL are estimated to be 5 to 6 years revenue therefore it does not justify the sale. Float more shares on the stock exchange.

To conclude, extraordinary circumstances demand quick and exceptional solutions. The wisdom of the management will be measured by their efforts to make the PTCL a model customer-oriented company without privatization.

The improvement should be visible practically and not through press advertisements. Success in today's competitive rapidly changing global economy is based on the ability of the company to adapt to the changing conditions without losing time.