PUBLIC, PRIVATE AND PUBLIC-PRIVATE PARTNERSHIP ANALYSIS

 

MEANING OF PUBLIC SECTOR, PRIVATE SECTOR AND PUBLIC-PRIVATE PARTNERSHIP  

Public Sector 

Public sector includes all the organizations and enterprises that are owned and controlled by the government. It can be called as the part of the economy that is controlled and managed by the state itself. It is also financed by the government. Typically, it includes public goods and governmental services such as public education, law enforcement, military, infrastructure, health care etc.  

Private Sector 

Private sector includes all the organizations and enterprises that are privately owned by individuals. It is also referred to as the ‘citizen sector’. These organizations have no link to the government. The government is not responsible for financing them, rather the person or party that owns them is responsible for financing it and dealing with its day to day affairs. Private sector organizations are mostly run for profit, but they can be non-profit as well. The private sector is an important part of an economy.  

Public-Private Partnership 

In public-private partnership, there is a form of collaboration between a government organization and a private company. They both finance the projects of the enterprise, and both are responsible for dealing with its day to day affairs. Through such a partnership the projects get completed sooner than usual as both the parties give their time to it. 

CONDITION OF ALL 3 IN PAKISTAN 

Now, we will be having a quick look on the current condition of all three sectors in Pakistan. 

Public Sector 

In Pakistan, the condition of public sector organizations is not very good. Their efficiency level is low, and people usually do not prefer public organizations. Following points explain the condition of public sector organizations in Pakistan: 

• Inefficient 

Most of the time, the public servants are not professionals or experts in their field which affects the overall efficiency of the organization. As the main motto of public organizations is social welfare so this decreases their ability to compete with others. They do not run to earn profit which results in lack of competition and ultimately inefficiency.  

• Service Delivery 

Mostly in public organizations in Pakistan, the service delivery is very poor. The customers are not dealt with properly. In government institutions, there is a trend of ghost schools. There are around 11,000 ghost schools in Sindh. 

• Time for Making Decisions 

One of the biggest problem with these organizations is that there is a delay in the process of decision-making. No one owns the matters of organization and no one takes the responsibility of decision-making. As a result, the whole enterprise suffers from loss. 

• Government Control 

Public enterprises are controlled entirely the government. The government interferes in each and every petty decision of the organization. This is another reason for its delayed decision-making. 

• Lack of Resources 

Public organizations sometimes lack the capital resources or even if they are present, they are not fully utilized to their capacity. We often come across problems like shortage of power, equipment breakdown, inadequate raw material etc.  

Following are some of the main public organizations working in Pakistan: 

1. Capital Development Authority 

2. National Highway Authority 

3. National Radio Telecommunication 

4. Oil and Gas Development Company Ltd. (OGDC) 

5. Pakistan Automobile Corporation Ltd. (PACO) 

6. Pakistan Post Office Department  

7. Pakistan Railways 

8. Pakistan Telecommunication Authority (PTA) 

9. WAPDA (Water and Power Development Authority) 

10. Pakistan State Oil Company Ltd.(PSO) 

Private Sector 

Private sector organizations are comparatively in good condition as compared to the public ones in Pakistan. That’s why people prefer the private sector over the public sector. In Pakistan, its condition can be explained through the following points: 

• Profit Motive 

Mostly, the main motto of the private sector organizations is to earn profit. Private companies make more profit than the public ones. This gives more return on the capital. There are some examples of private organizations which are not-for-profit. One of these is Shaukat Khanum Memorial Hospital which depends on zakat, sadqa and donations to provide free treatment to the needy. In 2018, the hospital provided free treatment to 75% of the patients. 

• Major Sectors 

Private sector comprises some of the most major sectors of Pakistan which have been running successfully. According to Asian Development Bank, 100% of the textile and telecommunications sector, over 77% of the commercial banking sector, and a significant part of the cement, sugar, automobile and fertilizer sector is included in the private sector in Pakistan. 

• Independent Management 

The management is entirely done by the sole owner of the organization or the group of directors who are elected representatives of the shareholders in case of a joint-stock company.  

• Competitive Culture 

The work culture within a private organization is very competitive. The career growth of an employee depends on his performance which motivates him to do better every day. This creates a healthy competitive environment for the employees to work harder. 

• Private Finance 

Private companies are fully financed by their owners and shareholders. They take little or no funds from the government depending upon how significant they are for the country. 

Following are some of the main private organizations working in Pakistan: 

1. Bank Al Habib  

2. Mars BPO Pvt Ltd 

3. Beaconhouse School System 

4. Lahore College of Arts and Sciences 

5. Agha Khan University 

6. Airblue 

7. ARY Digital Network 

8. The Educators  

9. Al-Khidmat Foundation  

10. Askari Bank. 
    

Public-Private Partnership 

Public-Private initiatives are strongly supported by the government of Pakistan. In 2021, Public Private Partnership Authority (Amendment) Act was passed which strengthened the legal and regulatory framework for implementing the PPPs (Public Private Partnerships). This also helped in promoting private sector investments into the infrastructure of the public sector. In Pakistan PPPs have been traditionally common in the transportation sectors, energy, and power generation. Recently, the government has committed that will be used in more sectors such as technology, aviation, tourism, and healthcare. 

Following are some of the main (PPPs) organizations working in Pakistan: 

1. Combined Effluent Treatment Plant (CETP) At Quaid-e-Azam Industrial Estate (QIE) 

2. Punjab Vehicle Inspection Certification System (VICS) 

3. Installation and O&M of water meters in lahore 

4. Tourist Resort/Entertainment Park At Uchali Lake, Soon Valley, District Khushab 

5. Model Town Housing Scheme, Sargodha 

6. Gwadar solar PV Plant 

7. Matiari-Lahore Transmission Line 

8. Citizen Facilitation and Service Centers in Southern Punjab 

9. Sports Complex, Multan 

10. Food Grain Silos in Punjab 

Also, there are some great benefits of PPP which are given in the image below:

After studying all 3 forms of sectors and their conditions in Pakistan, I think the best one is Public-Private Partnership. It would help in improving the public services delivery by implementing the practices of the private sector. This would ultimately increase growth and provide more job opportunities for people thus opening the doors to employment. The organizations and projects under PPPs attract private investments and increase efficiency by motivating them for profit. The sectors which are in poor condition due to lack of funds can also be improved through this.  

By:

Ramish Hina Faryal

BS. 6th/ GPP Morning

 

References: 

Public-Private Partnerships Definition. (2021, January 23). Investopedia. https://www.investopedia.com/terms/p/public-private-partnerships.asp 

Public–Private Partnership Monitor: Pakistan. (2021, September 6). Asian Development Bank. https://www.adb.org/publications/public-private-partnership-monitor-pakistan#:%7E:text=From%201990%20to%202019%2C%20Pakistan,Authority%20(Amendment)%20Act%202021. 

Shaukat Khanum Memorial Cancer Hospital & Research Centre » Shaukat Khanum Zakat Campaign 2018. (n.d.).  https://shaukatkhanum.org.pk/shaukat-khanum-zakat-campaign-2018/