ISLAMABAD: The Pakistan Telecommunication Access Providers Association (PTAPA) has warned against expanding direct government contracts for state-owned companies.
The association said the policy could weaken Pakistan’s private sector. It could also create more financially troubled state entities like Pakistan International Airlines (PIA).
PTAPA represents 26 companies across Pakistan’s technology and telecom sectors. Its members include Cybernet, Nayatel, PTCL, Wateen and Multinet.
PTAPA President Dr Shahid Farooq raised the issue in a letter. The letter was sent to Finance Minister Muhammad Aurangzeb.
It was also addressed to Planning Minister Ahsan Iqbal. IT and Telecom Minister Shaza Fatima Khawaja also received the letter.
The association has called for changes to public procurement rules. It specifically wants the government to remove Clause 42(f).
The clause is part of the Public Procurement Rules 2004. It allows government organizations and state-owned enterprises to contract directly with other government entities.
Such contracts can be awarded without competitive bidding under the existing provision. PTAPA believes this system is affecting competition in the market.
The association said state-owned enterprises have gained more IT and telecom projects. This trend has increased during the past five years.
Private companies have invested heavily in Pakistan’s digital infrastructure. Their investments have continued for more than two decades.
However, PTAPA said direct government contracting is creating an uneven business environment. Private companies must compete for contracts while some state entities receive direct opportunities.
The association also highlighted several advantages available to state-backed organizations. These may include government support and regulatory concessions.
They may also receive preferential treatment in certain situations. PTAPA said these advantages can make competition difficult for private businesses.
According to the association, reduced competition can affect overall efficiency. It may also reduce incentives for companies to introduce new technologies.
PTAPA said weaker competition could also affect research and development. Businesses may have fewer reasons to improve services and invest in innovation.
The association warned that this situation could create long-term financial problems. Organizations facing limited competitive pressure may become inefficient over time.
PTAPA compared this risk with several financially troubled state entities. It cited PIA and Pakistan Steel Mills as examples.
The association also mentioned power distribution companies. These entities have faced financial and operational difficulties over the years.
PTAPA believes the government should encourage fair competition in public procurement. It said both public and private companies should compete on equal terms.
The association has urged the government to review the current procurement framework. It wants competitive bidding to remain central to major government contracts.
PTAPA warned that continued preferential access for state entities could increase pressure on public finances. It said lessons from PIA and other struggling organizations should be considered.
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The association has therefore called for action to protect private-sector investment. It also stressed the importance of competition in Pakistan’s growing digital economy.
