Murree’s tragedy and fractured state institutions

The Murree tragedy clearly denotes Pakistan’s fractured system of governance. He highlighted the underlying conditions plaguing various branches of governance – the district administration under the leadership of the Deputy Commissioner, disaster management authorities at national and provincial levels, and the police. The tragedy also reflects the lack of planning and preparation on the part of ordinary citizens.

The deaths of around two dozen helpless tourists stranded in the snow revealed the propensity of politicians to use such tragedies to score political points. The way the opposition launched all kinds of innuendo against the federal government and the government of the Punjab betrayed the selfish instincts of these leaders. Equally pathetic was the lack of a coordinated response from key members of the federal cabinet as well as the cabinets of the Punjab and KP provinces. For hours, they contradicted each other, leading to more and more confusion about it. The PDMA was absent altogether as the NDMA chief took to the media later that afternoon to explain everything she had done.

What does all of this highlight? Well, it just highlights the massive fractures in our governance structures where dozens of Public Sector Companies (PSEs) tasked with thousands of employees cannot build or grow. Led by serving or retired civilian / military bureaucrats, these institutions are but one source of high salaries, benefits and privileges. But cumulatively, they bleed the national chessboard.

At least 134 PES gobble up around $ 4 billion a year. Most are in deficit. These deficits are filled by public funds which are essentially funds borrowed, either internally or abroad. Currently, we are all witnessing the implications of foreign loans. For a billion dollar installment, the government almost surrendered to the IMF, wreaking havoc with the Pakistani tax system and currency. Let’s look at three PSEs – namely Pakistan Steel Mills (PSM), Civil Aviation Authority (CAA) and Pakistan International Airlines (PIA) – to explain the rot in governance structures. All three look like a microcosm of the governance challenges facing Pakistan as a whole.

In a report the PIA submitted to the Supreme Court in June 2018, it spoke of accumulated losses of 356 billion rupees against assets of only 111 billion rupees. “The PIA can only continue to operate with financial support from the government,” the report said. The airline recorded net losses of Rs 25,013 million in the first six months of 2021, compared to Rs 36,536 million in the same period in 2020, 31.5% lower than the previous year . The main reason for the drop in revenues was the suspension of scheduled flights to the UK and Europe during the first quarter of 2021. This, however, is not a reason for continued mismanagement, overstaffing, Poor quality catering and poor treatment of passengers affected by flight delays or cancellations.

This is also in part related to CAA, the keystone of flight operations and airport management. An organization that has grown in size and in operations has both successes and shortcomings. Lately, all of a sudden, CAA decided to repair the Lahore runway, which was built less than two decades ago. It also destroyed the expensive Instrument Landing System (ILS) in early December, just as smog had started to envelop Lahore and its extensive surroundings. Lahore Airport handles around 30 domestic and international flights per day. The sudden repairs to the runway and the collapse of the ILS from early December resulted in large-scale disruptions – flight delays, diversions to Islamabad and cancellations. Ironically, the poor governance of the CAA often results in delays, cancellations and diversions of a substantial number of flights, but it is PIA that receives the criticism. It is PIA that is suffering financially. And the actions of the CAA are also causing a lot of discomfort for foreign airlines who are forced to reschedule their flights due to problems at airports in Karachi, Lahore, Islamabad and Peshawar. The combined poor performance of these two organizations ultimately puts Pakistan in a bad light. Does anyone care?

PSM represents another dark image of a state-controlled company. It costs the treasury billions of rupees every year. PSM’s debt and liabilities soared above Rs 650 billion. Deep-rooted status quo forces and various ministries – the Ministry of Industry and Production, the Ministry of Finance, the FBR, privatization commissions, private contractors and corrupt officials within PSM – continue to sideline. ‘Hear against the privatization or relaunch of factories, which have remained closed since 2015, but still incur 80 million rupees each month for gas use. The total SSGC bill payable by PSM until December 20, 2021 amounted to Rs78.894 billion.

Mysteriously, all of the Chairs of the Privatization Commission – Dr Hafeez Sheikh, Naveed Qamar, Mohammad Zubair Umar, Mohammadmian Soomro and others – have failed to part with PSM which owns 19,600 acres of developed land. It is a whole different matter that over 1,000 acres have already disappeared from housing programs. PSM still devours billions every month, with a retired sergeant as CEO.

Moreover, in these cases, the PTI government failed. Prime Minister Imran Khan’s pledge to step down from bleeding large state-owned companies is deadlocked. One wonders if he will be able, at all, to get his decision-making out of the clutches of the selfish status that continues to cling to the 19e governance regime of the century.

Posted in The Express Tribune, January 11e, 2022.

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