Govt Contracts Will Create More PIAs: Telecom Industry

The Pakistan Telecommunication Access Providers Association (PTAPA) has warned that expanding direct government contracts to state-owned companies could weaken the private sector and eventually create more loss-making entities like Pakistan International Airlines (PIA).

PTAPA represents 26 companies, including Cybernet, Nayatel, PTCL, Wateen and Multinet. PTAPA President Dr Shahid Farooq raised the issue in a letter to Finance Minister Muhammad Aurangzeb, Planning Minister Ahsan Iqbal and IT and Telecom Minister Shaza Fatima Khawaja.

The association wants the government to remove Clause 42(f) of the Public Procurement Rules 2004, which allows government-owned organizations and state-owned enterprises (SOEs) to contract directly with other government entities without competitive bidding.

PTAPA said the arrangement has enabled SOEs to secure a growing number of IT and telecom projects over the past five years. Private firms have invested heavily in telecom infrastructure and digital services over the past two decades, but direct government contracting is now creating an uneven playing field.

It also warned that state-backed entities can have advantages that private companies do not, including government support, regulatory concessions and preferential treatment. The president said the reduced competition can also weaken incentives for companies to improve efficiency, develop new technologies and invest in research and development.

PTAPA is of the view that organizations operating without sufficient competitive pressure can become inefficient and eventually turn into financial burdens on the state.

It pointed to PIA, Pakistan Steel Mills and distribution companies as examples of state entities that have struggled financially and operationally.

PTAPA also alleged that some SOEs subsequently subcontract projects to private companies without competitive bidding. The association has therefore called for SOEs to compete with private companies on equal terms for government-funded IT, telecom and digital projects.

It said restoring open competition would help protect private-sector investment, encourage innovation and prevent the government from crowding out businesses that contribute through taxes, employment and investment.

Get the latest business news, market insights, and economic updates wherever you prefer.

It is amusing to watch a group of milk babies attempt to run an economy.

We prefer a weakened private sector. Look what we are reduced to

A gen retd is being chairman and avoiding 40 billion taxes