Govt Contracts Will Create More PIAs: Telecom Industry

The Pakistan Telecommunication Access Providers Association (PTAPA), representing 26 companies including Cybernet, Nayatel, PTCL, Wateen and Multinet, has expressed concerns that increasing direct government contracts to state-owned enterprises could lead to more struggling entities akin to Pakistan International Airlines (PIA).

In a letter to key government officials, PTAPA President Dr. Shahid Farooq argued that removing Clause 42(f) of the Public Procurement Rules 2004 would allow for fairer competition. Currently, SOEs can secure IT and telecom projects through non-competitive means, an arrangement that has seen increased involvement in recent years.

However, PTAPA warned that this practice undermines the private sector, providing state-backed entities with advantages such as government support and preferential treatment. This reduced competition can lead to inefficiency and financial burdens on the state, as seen with entities like PIA, Pakistan Steel Mills, and distribution companies.

PTAPA also accused some SOEs of subcontracting projects to private firms without competitive bidding. The association urged the government to ensure equal competition for government-funded IT, telecom, and digital projects to maintain private investment, foster innovation, and prevent the government from displacing businesses that contribute through taxes, employment, and investment.