Why State Enterprises Fail or Underperform: Case of Pakistan Railways by Shahid Hussain Raja

Explains the causes of decline of Pakistan Railways and suggests measures to revitalise it.

Why state enterprises fail or underperform: case of pakistan railways

This short book is an expanded version of an article I wrote in LinkedIn about Pakistan Railways. Titled as Why State Owned Enterprises underperform? it explored the reasons for the failure of State Owned Enterprises with particular reference to the case of Pakistan Railways. After its publication, I have received a lot of comments about the lessons to be learnt from this case and how to restructure these state owned entities. This short book is in response to these comments.

Genre: SOCIAL SCIENCE / Developing & Emerging Countries

Secondary Genre: BUSINESS & ECONOMICS / Infrastructure

Language: English

Keywords: State Owned Enterprises, SOE, Pakistan Railways, Pakistan, Railways

Word Count: 30,000

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Sample text:

State Owned Enterprises (SOEs) come with different names and sizes depending upon the country they are incorporated in or the purpose for which they have been established. Their names thus range from state-owned company/entity and state-owned enterprise (SOE) to Government/publicly-owned Corporation, and public sector undertaking, or para-statal. However whatever its name, a SOE is a legal entity that undertakes commercial activities on behalf of state.

Legal status of an SOE can vary from being a part of the government to being a corporate firm registered with the stock exchange. In this case, state holds majority or minority shares while its management may be with private sector professionals. Although they invariably also have public welfare as one of their main objectives, SOEs differ from other forms of government agencies or state entities which have been established to pursue purely non-financial objectives.

There are numerous complaints about these SOEs in almost every country with variation of severity of complaints from country to country and from entity to entity. These range from inefficient operational inefficiency, recurring huge losses, poor customer services, corruption and mismanagement. Unfortunately while condemning these state-owned and managed organisations for the above mentioned weaknesses, we normally do not have a clear perspective to judge whether these SOEs are profitable or not or why they suffer losses.

Before pointing a finger on their huge losses we must keep in view the context in terms of ownership, objectives and working environment which determine the profitability or otherwise of a state enterprise. You cannot just compare them with private sector enterprises and start blaming them for incurring huge losses. A private sector enterprise has certain privileges which public sector enterprise cannot even think of..


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JUAN MANUEL RODRIGUEZ GONZALE translated my ebook "Why State Enterprises Fail or Underperform: Case of Pakistan Railways" into Spanish. I t is a very faithful and accurate translation, finished within the timeline he oromised. extremely grateful.

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