Pakistan Privatization Plan Gains Momentum as Government Targets DISCOs, Banks and Airports
The Pakistan Privatization Plan is entering a potentially decisive phase as the government and Pakistan Business Council move to expand private-sector participation in state-owned enterprises, capital markets and major public services. The plan includes possible privatization of power distribution companies, banks and airports, along with restructuring, rightsizing and the listing of major public-sector entities. The development signals a major shift in Pakistan’s economic policy, but it also raises an uncomfortable question: can privatization deliver better services and stronger governance, or will it simply transfer inefficient public assets into private hands without fixing the underlying problems? Advisor to the Finance Minister Khurram Schehzad held discussions with Pakistan Business Council Chairman Ziad Bashir and Chief Executive Officer Javed Kureishi at the Finance Division. The meeting focused on attracting investment, restructuring state-owned enterprises and creating a business environment capable of supporting long-term economic growth. Pakistan Privatization Plan Puts DISCOs, Banks and Airports in Focus Under the Pakistan Privatization Plan, the government is considering greater private-sector involvement in power distribution companies, banks and airports. The stated objective is to improve efficiency, attract investment and raise the quality of public services. The proposal is significant because DISCOs remain closely linked to Pakistan’s chronic power-sector inefficiencies, including distribution losses, weak recoveries and governance problems. Bringing private investors into the sector could introduce stronger financial discipline, but privatization alone will not solve structural weaknesses if regulatory oversight remains ineffective. The proposed privatization of banks and airports also deserves close scrutiny. The government must ensure that transactions are transparent, competitively structured and designed to protect consumers and taxpayers rather than merely generate short-term fiscal receipts. State Life IPO Could Open a New Capital Market Chapter Another important element of the Pakistan Privatization Plan is the proposal to bring major public-sector entities to the capital markets through Initial Public Offerings. The State Life Insurance Corporation is among the entities being considered for an IPO. A successful listing could broaden investor participation, improve corporate transparency and expose a major public-sector institution to greater market discipline. However, listing a state-owned company should not be confused with genuine reform. An IPO can improve transparency only if investors receive meaningful financial information, independent governance is strengthened and management is held accountable for performance. Rightsizing Could Become the Real Test of Reform The Pakistan Business Council has supported the government’s rightsizing initiative and agreed to submit recommendations on privatization, SOE restructuring and areas where private-sector participation could improve economic efficiency. This is perhaps the most important part of the government’s agenda. Pakistan has repeatedly announced plans to reform loss-making state enterprises, yet implementation has often been slowed by political resistance, institutional interests and concerns over employment. Rightsizing therefore cannot simply mean reducing government employees. It must involve eliminating overlapping institutions, improving management accountability, digitizing operations and stopping politically motivated appointments. Without these measures, Pakistan could end up privatizing individual entities while leaving the broader culture of inefficient public-sector management untouched. Pakistan Privatization Plan Also Targets Tax Reform The discussions also covered tax rationalization and the development of a medium-term tax policy framework. The government and PBC agreed on the need for a predictable, transparent and competitive tax system that encourages investment and business expansion. PBC welcomed measures under the Federal Budget FY27 that focus on broadening the tax base and increasing economic activity rather than relying mainly on higher tax rates. It also supported incentives for exporters and businesses designed to reduce the cost of doing business. This is an area where the government deserves credit, but implementation will determine whether the policy produces results. Businesses need consistency, not temporary concessions followed by sudden tax changes. Privatization Will Not Work Without Transparency The Pakistan Privatization Plan could become one of the country’s most consequential economic reform programmes, but its success should not be measured by the number of entities sold. The real test will be whether privatization reduces fiscal pressure, improves services, attracts fresh investment and creates competitive markets. The government and PBC have agreed to continue consultations on economic reforms, private investment and competitiveness. That engagement is useful, but the business community must also demand transparency over valuations, bidding procedures, regulatory safeguards and post-privatization performance. Pakistan does not merely need to sell state assets. It needs to build institutions capable of ensuring that private ownership delivers public economic value. If the government gets this balance right, the Pakistan Privatization Plan could help move the economy from state dependence toward investment-led growth. If it focuses only on raising immediate cash, however, privatization could become another short-term fiscal exercise rather than the structural transformation Pakistan urgently needs. Final Takeaway Pakistan’s renewed privatization push reflects a broader attempt to reduce the state’s role in commercial activity while attracting private investment and improving the performance of public-sector entities. The focus on DISCOs, banks, airports, State Life and SOE rightsizing could create meaningful opportunities for reform. However, successful privatization will depend on transparent transactions, credible valuations, effective regulation and stronger corporate governance. Selling state assets without addressing their underlying structural weaknesses would provide only temporary fiscal relief rather than lasting economic reform.
