Privatisation framework

THE proposed merger of the Privatisation Commission and the Public-Private Partnership Authority (P3A) into a single institution is a sensible move. It will end the duality of functions and provide a more coherent framework for mobilising private capital to manage public assets and develop physical infrastructure for which the state has limited resources to spare.

Although the two bodies operate under separate laws, their mandates intersect in bringing private capital and expertise into areas dominated by the state. A unified entity could offer a common platform for evaluating these options.

Privatisation involves transferring ownership or control of state assets, while public-private partnerships (PPPs) allow governments to enlist private capital for projects they cannot finance. Both approaches require sound financial assessments and clear risk allocations.

With Pakistan facing persistent fiscal constraints, the state cannot afford to finance loss-making enterprises indefinitely. Private investment can help ease these pressures, but it is not an end in itself. Poorly structured transactions can leave the state with inadequate returns or costly contractual obligations.

The proposed legislation envisages four public funds to support privatisation and PPP transactions. These instruments could help prepare viable projects and attract investment. However, they must not become vehicles for subsidising commercially unsound ventures. Government guarantees and liabilities should be disclosed and assessed before deals are approved.

The proposed legal protections for serving and former officials acting in good faith also require careful rethinking. Officials should be protected against frivolous litigation when making decisions in the public interest. Such protection must not, however, become immunity from accountability.

Making PPP agreements accessible as public documents is also positive. Public scrutiny is particularly important when private investors enter long-term arrangements that may impose financial obligations on taxpayers and successive governments.

The new arrangement offers an opportunity to improve the management of state assets and infrastructure investment. Its success will depend on securing fair value for public property, attracting credible investors and ensuring that partnerships deliver tangible benefits.

The bill proposes a majority-independent board with private-sector representation to strengthen commercial decision-making. Its effectiveness will require transparent appointments, relevant expertise, political independence, clear performance benchmarks, strong accountability, and enforceable conflict-of-interest rules to ensure effective governance.

The state must now ensure that commercial discipline, transparency and accountability guide its implementation.

Published in Dawn, October 27th, 2026