Pakistan Steel Mill: Government paid Rs 55bn over 5.5 years to bear losses. Total employees are down from 30,000 to 9,300 (with monthly salaries of Rs 700mn, these too are being laid off with Rs 20bn generous exit package). Total debt of Rs 230b/$1.5bn (forget the present values of the money lost or that could have been otherwise spent on Education & Health).
The path to recovery is a) let private sector operate as a partner b) lease the 18,000 acre lands worth billions of dollars to industries
PIA too would need to be right-sized. Emirates, have decided to cut 1/3rd (30,000) of the workforce foreseeing a decline in air fall. And it wasn’t over staffed either. Save tax-payers a Rs 72bn every year that can be channeled for better education. 14,500 employees receive Rs 24bn salaries in a year. Get provincial skin in the game. Use that money to reduce air-fare, upgrade fleet, buy more slots and compete with private sector.
After Steel Mills, next “reform” agenda should include fixing PIA, Discos, Power sector, Tax collection, weed out corruption and induct private sector experts. Fixing the economy is a must.