The federal government has officially shelved plans to privatize the Pakistan National Shipping Corporation (PNSC) through a public offering. This decision stems from PNSC’s strategic importance to national security, economic stability, and its critical role in the maritime sector.
Established under the Pakistan National Shipping Corporation Ordinance 1979, PNSC is a key state-owned enterprise (SOE) listed on the Pakistan Stock Exchange (PSX). The government holds an 87.56% stake, with the remaining 10.87% owned by the public and the PNSC Employees Empowerment Trust. Initially, the privatization plan aimed to raise funds for fleet expansion by increasing private shareholding. However, following detailed reviews and consultations, this course of action has been abandoned.
Why PNSC Was Classified as a Strategic SOE
In May 2024, PNSC’s board of directors classified the corporation as a “strategic state-owned enterprise” under the State-Owned Enterprises (Ownership and Management) Policy, 2023. This decision emphasized its critical role in:
- Ensuring Supply Chain Reliability: PNSC guarantees seamless supply chain operations for state institutions.
- National Security: It serves as a second line of defense during crises and conflicts.
- Economic Stability: PNSC’s operations reduce war risk surcharges and enable the transportation of sensitive cargo.
These factors reinforced the board’s resolution to retain PNSC under government ownership.
Challenges and Recommendations
Despite its profitability, PNSC faces operational challenges due to an aging fleet, which has impacted its utility and competitive edge in logistics. The Ministry of Maritime Affairs proposed privatization through the stock market to fund fleet expansion. However, ministries opposed this move, citing potential risks to national security and economic stability.
In September 2024, the Cabinet Committee on State-Owned Enterprises (CCOSOEs) reviewed the proposal, affirming PNSC’s strategic importance. The task force on the maritime sector also endorsed retaining PNSC as a strategic SOE in October 2024. Subsequently, the cabinet deferred a final decision, stating that PNSC’s case would be evaluated alongside other similar enterprises.
Alternative Plans for Revitalization
The government is now exploring alternative funding sources to enhance PNSC’s fleet and operational capacity. Strategies under consideration include:
- Strengthening PNSC’s logistics capabilities to improve commercial viability.
- Revitalizing its fleet to meet modern standards and increasing its competitiveness.
- Identifying partnerships and funding mechanisms that align with national interests.
- This strategic move underscores the government’s commitment to balancing economic growth with national security.
