Analysis of Public Sector

Organization

What is Public Sector

Organization?

Are Owned and controlled by the

government (or local government).
Provide
public
services,
public
goods which cause problems for the
private sector, and so they are often
better provided by the public sector.

Types of Public Sector

Organizations
02 Types
1. Public Utilities
2. Nationalized
Industries

1. Public Utilities

Organizations provide
household services such
as
water,
sewerage,
electricity gas and Public
Health System - Hospitals.

Nationalized Industries
This was partly to gain control
over the main parts of the
economy.
It was also partly to control
monopolies which could act
against the public interest,
especially by charging high
prices to consumers.
These industries became more
and more inefficient until they
needed government subsidies
to stay in business.

PIA Pakistan International

Airline
PIA is a national flag carrier and a
state-owned
enterprise
of
the
Government of Pakistan.
Owned by the Government of Pakistan
(90.22%) and Shareholders (9.8%).
Regulated by the Ministry of Defense
It employed 18,043 people as of May
2012.
Headquartered at Jinnah International
Airport Karachi.
have
23
domestic
and
36
international
destinations
in
25
countries across Asia, Europe, North
America, Middle East and Far East.

Birth of an Airline, Birth of a

Nation
In June 1946, Mr. Muhammad
Ali Jinnah with his singular
vision
and
foresight
he
realized that with formation of
two
wings
of
Pakistan
separated by thousands of
miles a swift and efficient
mode
of
transport
was
imperative.
He
instructed
Mr.
Mirza
Ahmed Isphahani, a leading
industrialist to setup national
Airline on priority basis.

Orient Airways takes to the

Skies
On October 23, 1946 named Orient
Airways Ltd. In Calcutta.
got an operating license in May 1947.
Four Douglas DC 3s were purchased.
Within two months of Orient Airways
Pakistan was born.
The initial routes were:
Karachi Lahore Peshawar,
Karachi Quetta Lahore and
Karachi Delhi Calcutta Dacca.
By the end of 1949, Orient Airways
had acquired 13 Airplanes.

A New National Flag Carrier for

Pakistan

The Government of Pakistan decided to form

a state-owned airline and invited Orient
Airways to merge with it.
The out of the merger was the birth of a new
airline through PIAC (Pakistan International
Airline Corporation) Ordinance 1955 on
January 10, 1955.

PIAs First International Service

First scheduled international service
was inaugurated in the year 1955.
From Pakistan to London Heathrow
Airport via Cairo and Rome.

New Management, New Directions,

New Planes
Mirza Ahmed Isphahani
was the first chairman and
he appointed Mr. Zafar-ulAhsan
as
Managing
Director of PIA first time
from 1956 to 1959.
Mr. Zafar-ul-Ahsan - MD
was to house all the major
departments of the airline
at PIA Head Office building
at Karachi Airport.

The Golden years of PIA

The Golden years of PIA
under
the
visionary
leadership
of
Air
Commodore Nur Khan as
the
Managing
Director
appointed
by
the
Government of Pakistan in
1959.
Every Fifth PIA Passenger a
New One.

Unbroken Records
In 1962, The Boeing 720 B
was on its maiden flight
when it flew from Seattle
London to Karachi by PIAs
Senior Captain Abdullah
Baig.
PIA completed the flight
in 06 hours, 43 minutes
and
50
seconds.
A
record which remains
unbroken to this day.

In 1970s:
Financially successful
period of Air Commodore
Nur Khan.
Pakistan Army used PIAs
services to airlift the
soldiers and ammunition
to East Pakistan.
In 1974 PIA launched
Pakistan International
Cargo offering air freight
and cargo services.

In 1980s
In
Mid
1980s,
PIA
established Emirates by
leasing
two
of
its
airplanes, as well as
providing technical and
administrative
assistance to the new
carrier

In 1989, Maliha Sami was

the first female pilot of PIA.

In 1990s and 2000s

PIA introduced a new livery in
January 2004.
European Union Ban:
On March 05, 2007 the European
Commission
banned
all
34
planes of PIAs 42- planes
fleet from flying to Europe cities
safety concerns of its aging fleet.
The ban was completely removed
on November 29, 2007 by EU
Commission and PIAs entire fleet
was permitted to fly to Europe.

Current Decade
In February 2012 PIA ordered 05
more Boeing 777-300LR aircraft with
delivery starting in 2015.

PIA from National Flag Carrier

to
PIA is worthy ambassador for
Pakistan and its people.
PIA performed well until the
1970s.
Its services and personnel
have helped to make the
country more widely known
and
her
people
better
understood in a large part of
the world.

A-National Liability
In 2000s despite remaining
the largest operator on
Pakistans international and
domestic routes, the carrier
is increasingly losing its
share in the global market
due to the management's
constant negligence and
massive
corruption
executed under the banner
of aircraft replacement.

Financial Highlights (Rs. In billion)

Particular
s

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

39.23

43.61

43.67

47.95

57.79

64.07

70.59

70.48

88.86

94.56

107.53

116.55

82.03

Operating
Expenses

42.03

43.24

38.10

42.57

55.87

67.08

79.15

76.42

120.5
0

98.63

106.81

134.48

104.2
5

Net Profit
or Loss
before tax

(2.80)

(0.36
6)

5.58

5.377

1.92

(3.11) (8.58) (5.94)

(31.6
4)

(4.06)

0.72

(17.93
)

(22.2
2)

Net Profit /
Loss after
Tax

(5.16)

(2.20)

1.87

1.30

2.31

(4.41)

(12.7
6)

(36.1
4)

(5.82)

(20.79
)

(26.77
)

(22.4
3)

operating
Revenue

Total
Loss
Accumula
ted

(144.4)

(13.4
0)

5
0
-5

Years of PIA's Profit / Loss

1.87

1.3

2000

2.31

2001
-2.2

Years
2003

-5.16

2004

2005

-4.41

2006

2007

2008

2009

2010

2011

2012

-5.82

-10
-13.4
-15
Accumulated loss on 30.09.12 is Rs.144.40 Billion.

Profit / Loss Rs. Billions (After Tax)

-20

-20.79

-22.43

-25
-26.77

-30
-35

Profit in Billions
Loss in billions

-36.14

-40

From 2008 to 2011, the airline incurred a phenomenal

loss of over Rs.62 Billion Twice the accumulated loss
of its 55 years history! Which brought PIA Pakistan
International Airline from a national flag carrier to
a national liability.

Findings of PIA Crisis

The
Pakistan
International Airline is
suffering from severe
financial crisis. It is in
fact passing through a
critical phase.
The major reasons are:

PIAs Fleet
39 aircrafts in its fleet.
A number of aircrafts have been
grounded due to shortage of
spare parts or overhauling.
Recently
Captain
Nadeem
Yousafzai MD of PIA said that
the airlines five year revival plan
for 2010-14 is pending with the
finance ministry which would not
possible without adding 16-new
aero planes to its fleet.

and
Devaluation of Local
Currency
Losses of more than
Rs.53 billion from
2006 to 2008 and
also suffered huge
losses in 2009 and
2010
particularly
due to the increase
in the price of fuel
and devaluation of
Pakistani Rupee.

Over Staffing
PIA had 18,231 employees
making 467 employees per
aircraft.
No major air travel on the
planet has that type of ratio.
The typical ratio of the
profession is 170 employees
per air craft and finest are
70 employees per air craft.

A big Question Mark

?
As per the typical ratio PIA needs to have
6630 employees to run the airline and with
200% overpopulated human energy why our
air travel not succeeding?
Why 1000s of contractual employees
happen to regularized at any given time
when air carriers all over the world
practicing downsizing to chop their cost by
reducing the workers per aircraft ratio?
The number of people hired by the
incumbent government is highest in the
history of the national flag carrier with 1,179
employed in 2010 alone.
Do you know the criteria of employing
these folks? The answer is easy and
noisy, the selection criteria is driven by
Political Motives, right from top to
bottom.

Maintenance and Repair

Problems
It is stated that tender for the
maintenance of the aircrafts has
been given to a company that
does not
have international
reputation.
The obscure vendors, hired by
PIA are one of the major
problems. They are just like risky
shots in cricket.
The
airline
that
once
assisted other airlines is now
losing its control over itself.

Flight Delays,
Emergency Crash Landings
and Cancellation
Flight delays and cancellations
have become the norm rather
than the exception.
Naturally this situation can not
be tolerated for unlimited
period.
Several untoward incidents
occurred in PIA in the last
decade.
The
passengers
should not suffer in its
custody.

Bad Governance and

Poor Performance

Sagging Seats and soggy seat covers, messy

floor carpets, dirty and gritty outlook,
malfunctioning toilets doors, rattling planes
and failing equipments are causes of delayed
flight.

It is pertinent to mention that one of PIA air

craft was inspected at Paris Airport by the
inspectors of safety Assessment of Foreign
Aircraft (SAFA) while in route from Paris to
Lahore. They detected several snags in the
aircraft. The organization warned PIA to
overpower the shortcomings or face the
consequences. The team detected fuel
leakage from one of the engines of Airbus A310. In consequences passengers were
evacuated in emergency. There is a long list
of snags showing the real efficiency of
the PIA administration.

Despite the crippling losses, PIAs employees

Corruption
Recently,
Transparency
International
Pakistan (TIP) dispatched a letter to the chief
justice of Pakistan to take suo moto notice
against PIA for deliberate default in repair
payments for 12- now grounded airplanes
and fabricating excuses to purchase 39-new
airplanes at the estimated cost of Rs.239.76
billion.
In Saga deal in February 2012. PTIs
information secretary Shafqat Mahmood
disclosed that PIA signed an agreement to
purchase 05 Boeing 777 for Rs.143.85
Billion. The process according to Shafqat
Mahmood was rightfully questioned by
Transparency International which believed
that Rs. 4.7 billion kickbacks were taken in
the deal i.e. almost 1/3 of the total amount.

These types of huge on-going and past

experiences of corruption made PIA
almost bankrupt as stated once by
Capt. Ijaz Haroon in 2008.

Liabilities
In a meeting of the
Public
Accounts
Committee (PAC), the
Managing Director Mr.
Nadeem Yousafzai said
that the one of the
causes of the failure of
PIA is the restructuring
of debt stock of Rs.140
billion and it would
depend
on
21%
depreciation
of
the
rupee against the US
Dollar in the next four
years and it will increase

White Elephant
The White Elephant idiom is
renowned as Something
that is expensive to keep
Up.

And now PIA Pakistan

International Airline is just a
White
Elephant
as
unfortunately it is one of 08
airline companies across the
globe functioning with costs
higher than returns which is
once a remarkable airline in
the world.

Public-Private Partnership
Transition to Greater Economic
Freedom

A general premise of economic freedom rests

on the minimum role of the government in
service provisioning.

However there are services, or economic

limitations of some recipients of these
services, which make it difficult for the
government to completely roll back from
direct provisioning.
This situation also arises where the private
sector sees little economic incentives or
experiences
insurmountable
regulatory
restrictions.

To counter these problems,

a combination of public and private
sector is used, commonly known as
Public-Private Partnership (PPP).

Public-Private Partnership
Policy
The Government of Pakistan issued a
comprehensive policy document on PPP
titled Private Participation in Providing More
and Better Public Services through Improved
Infrastructure in 2007.
This
document
states
that
many
economically and socially worth projects
lack the ability to raise the requisite
revenues to ensure adequate returns for the
investor risk.
The national policy document also mentions
following priority areas for PPP contracts:

Transport and logistics.

Mass urban public transport.
Municipal services (water supply and sanitation,
low-cost housing and education and health
facilities).
Small scale energy projects.

PPP Investment :
Pak Rupees 30 Billion (2008)
Trasport and
Logistics
29%
43%

Office /
Industry
Muniscipal
Services

9%
19%

Mass Urban
Public
Transport

Public-Private Partnership
Transition to Greater Economic
Freedom
As governments turn to the private
sector
to
provide
services
once
delivered by the public sector, they
must learn new skills. An increasingly
common
way
is
public-private
partnerships units. Making the right
choices on what roles such units play,
where they are located, and how
conflicts of interest are managed is
critical in their success.
Public-Private Partnership represents a
transition from an omnipresent government
to a completely free private sector.
It appears that if roles are properly defined,
this may well lead to an efficient service
provisioning based on the principle of
financial viability, rational price structure
and user-friendliness.

PIA to Come Out of Financial Crisis:

Some suggestions
and
recommendations
on consideration
of how PIA to
come
out
of
financial crises.

Keep PIA Away from Ministry

Need Quality Leadership

Retrospectively head of PIA has full

backing of the Chief Executive of the
country. He stands a chance to bring
about an improvement otherwise the
person is at the mercy of the line ministry.

Appointing Secretary Defense or Minister

of Defense as Chairman PIA places the
organization into the firm grip of ministry
itself.

Efforts aimed at moving PIA away from

Ministry of Defense to communication
have been consistently resisted by those
in uniform as the organization provides a
lucrative job, Pre or post retirement.

As in the golden period of Air Commodore

Nur Khan who enjoyed freedom to making
appointments,
postings
and
taking

Privatize PIA, Now!

A fiscally strapped government is unable to provide
financial help in executing a business plan to
augment the fleet.
The solution lies in restructuring the airline on
commercial principles.
Successful privatization of banking is touted as
remedy.
Though PIAs situation is somewhat different as
Pakistani talent pool in international finance was
strong.
We need to take a decision across the political divide
to privatize PIA. Once the decision is taken, an
aviation expert can be made its Chairman.
At present, the airline lacks the management and
marketing
skills
to compete
however
PIAs
engineering and operational cadre is still quite
strong.
So privatization is a corrective measure to turnaround
the national flag carrier to the skies once again.
And it will save injection of billions of rupees to the
airline in every bailout package yearly.

Eradicate
Corruption
Despite the tremendous inadequacies
and corruption in the airline, it still has
74 % domestic and 40% international
market share which shows that if
corrective measures are taken in time,
the airline can succeed in achieving an
even greater share of the market.
Eradicate corruption and its turnaround
strategy will be an end to government
and political forces interference in PIA.
This will greatly aid in removing poison
from PIA otherwise the companys
revenue always used to fill the bellies of
corrupt politicians.

Restructuring the Human

Resource
For rationalization of worker, PIA intends
to
transfer
4339
employees
on
deputation to other allied departments
which would ensure Rs.3.8 billion
savings in five years.
Every year PIA should remove staff to
try half the current number of staff and
cut down on salaries.
The Chairman should think about telling
new start up airlines in the Middle East
to recruit exclusively from PIA and PIA
should not replace those leavings to
reduce administrative expenses.

Offering Packages to Increase

Number of Passengers
The management has to
look on other measures
to increase passengers
like tie in with festivals
and tourism events in
Pakistan and should
work on price and
numbers of flying as
well as in Hajj and
Umrah Packages.


The Conclusion
The conclusion from this is the fact
that PIA has already been bankrupt
and this is the time to begin taking
actions rather sit idle and awaiting
miracles.
PIA is within extreme economic crisis
and it takes some hard choices and
actions to drag itself into business.
PIA is struggling with an emergency
due to poor management, nepotism,
corruption
and
insufficient
technology.
Some serious, quality leadership and
firm making decisions are required to
save PIA from complete destruction.

Rail Transport in
Pakistan
Pakistan
has
celebrated
150
years of Railway so
it has a rich railway
heritage.
It was in 1861 when
it
came
into
existence in the
form of railway built
from
Karachi
to


British Era - Karachi to Peshawar (Main
Line)

Sir Henry Edward Frere was appointed as

the commissioner of Sindh in 1851, He also
initiated the survey for a Railway Line in
1858.
The Sindh Railway was formed in 1855 and
on May 13, 1861 succeeded in connecting
Karachi to Kotri. This was first railway line
for public traffic between Karachi City and
Kotri, a distance of 108 miles (174 Km).
The 04 sections i.e. Sindh Railways, Indus
Flotilla Company, Punjab Railway and Delhi
Railways working in a single company
purchased by the secretary of State for
India in 1885 and named North Western
State Railways in 1886.


British Era - Karachi to Peshawar (Main
Line)

The railway line from Peshawar

to
Karachi
closely
follows
Alexanders
line
of
March
through
the
Hindu
Kush
Mountains to the Arabian Sea.
Different sections on the existing
main line from Peshawar to
Lahore and Multan and branch
lines were constructed in the last
quarter of 19th century and early
years of 20th Century.

Post Independence
At the time of independence in
1947, 3,133 Km route of North
Western
Railways
were
transferred to India leaving 8,124
Km route to Pakistan.
In 1954, the railways lines was
extended
to
Mardan
and
Charsada. In 1961 the North
Western
Railway
renamed
Pakistan Railways and in 1969
The KotAdu Kashmore line was
constructed.

Operational Structure
Ministry of Railway is responsible for overall
control of Pakistan Railways as well as to guide
the overall policy.
There are four Directorates in Pakistan Railway
namely;

Administrative Directorate.
Technical Directorate.
Planning Directorate.
Finance Directorate.

Pakistan Railways has business directions as;

Infrastructure Business Unit.

Passenger Business Unit.
Freight Business Unit.
Manufacturing and Services Unit that look after.
Concrete Sleeper Factories.
Carriage Factory.
Locomotive Factory Risalpur.
Medical and Health Services.
Railway Construction Company.

Human Resources
Pakistan Railway has about
90,000
employees
consisting of staff and
officer as of 2008.
71% of the total employees
are
working
in
Civil,
Mechanical
and
Transportation departments.
The remaining 29% were
working in administration.

Running Out of Steam Pakistan Railways

Railway sector in
Pakistan has lost
its
position
in
transport
sector.
The market share
of Pakistan Railway
kept on declining
with the passage
of time.

Financial Position
Financial performance of Pakistan Railways from the past
06 years 2007 to 2012
Particulars

2007-08

2008-09

2009-10

2010-11

2011-12

Q2 201213

Net Profit / Loss

(Rs. In billions)

15.9

20.2

23.06

28.45

13.0

13.30

Years of PR's Profit / Loss

Years
0

-5
-10

Net Profit / Loss after deductions

-15

-13-13.3

-20 -15.9
-25
-30

Loss in billions

-20.2
-23.06
-28.45

The accumulated loss for the last Six Years is

of Rs.114.45 Billion.

Findings of Pakistan
Railways Crisis

Following are some

causes
for
the
financial crisis of
the rail transport
service of Pakistan.

Passenger Trains
Annual
Passenger
volume carried by PR in
late
1970s
was
approximately
145
million, which has come
down to 59 million in
1992 / 1993. Means it
lost about 60%. The total
revenue during 19992000 amounted to Rs.4.8
Billion.

Freight Units
Freight business was of
PR was 15 million tons in
late 1960s but has
come down to about
50% i.e. 07 million tons,
it is moving only 11% of
total petroleum products
and 2% of the total
containers
which
reduced the revenue of
the freight business unit.

Natural calamities
According
to
the
National
Disaster
Management Authority,
the heavy floods have
caused a loss of Rs.6.7
billion to the railway
network
as
several
hundred kilometers of
lines
were
washed
away.

Law and Order Situation of

Pakistan
The
railway
coaches were also
the targets of mobs
and arson attacks
after
Benazir
Bhuttos
assassination
resulting in huge
losses.

Shortage of Locomotives
Out of 522 total locomotives only
220 are in working order, out of
which 100 are in poor condition in
2010.
currently only 58 locomotives are
in working conditions and needs
consistent repair and maintenance.
out of 90,000 employees 01
locomotive has a burden of 1,516
employees
other
than
the
operational cost.
This is a major cause of the crisis
of Pakistan Railway in revenue
generation.

Bunged Supply of Fuel

This problem began from
January
2011
when
a
Pakistan Railway was unable
to pay Rs.700 million to PSO
and in consequences PSO
stopped the supply of fuel to
Pakistan Railway.
According to a senior officer
at Railways Headquarter 30
freight trains had to be
stationed in yards.

Poor and Insufficient

Management
I am confused to see that if we want
to obtain urgent ticket reservation,
we will not get the empty space in
any train and even on major holidays
on Eids and Independence day we
can travel only if we have advance
ticket at least fifteen days or more.
Innocent and poor people had to wait
for many hours and I havent seen
any train to come at time in my 22
years life. Also these delays and
failure of engines are the consistent
news on channels these days.

Corruption, Nepotism The other problems in PR

A
government
spokesman said that
the Federal Minister
Cabinet
approved
Rs.10.1
billion
in
August 2011 for PR to
upgrade
equipment
but only Rs.1 billion
has utilized in PRs
concern.

PRs Liabilities
The
annual
losses
resulted in a PR debt of
Rs.340 billion.
The national bank for
which it has been paying
Rs.4.6 billion in interest
annually while at the
same time the revenue
has declined for the past
three years.

PPP Public Private Partnership

Till now year 2012, PR has privatized 04 of its trains i.e.
Shalimar Express and Business Train, Hazara Express and
Fareed Express for making revenue on following terms.
But due to lack of poor management and corruption PR
facing troubles in generating the desired revenue as
millions of amount is pending as Cash Receivables is one
of the causes of crisis of Railway due to noted commissions
of the high ups of PR with the firms.

Trains
Shalimar Express
Business Train
Hazara Express
Fareed Express

Revenue Per
Day
Rs.
Rs.
Rs.
Rs.

2.8 Million
3 Million
2 Million
1.1 Million

Revenue Per
Annum
Rs. 1.022 Billion
Rs.1.095 Billion
Rs. 730 Million
Rs. 401.5 Million

White
Elephant
Despite
having
worlds best railway
track flowing across
the country like the
course
of
rivers,
Pakistan
Railway
proved is just like a
White Elephant
as its slope is on a
ramp
in
declining

Pakistan Railways:
A Completely Mismanaged Sector
in Need of Fresh Approach

Following are some

suggestions
to
improve
the
condition
of
railway system of
Pakistan.

Eradicate Corruption
First
of
all
government
should
eradicate corruption
in railway sector from
top to bottom.

Corruption is
menace
that
destroying it.

the
is

Privatize Pakistan
Railway
Pakistan Railways should be privatized
completely.
This is also the possible solution of the
problem
because
currently
the
government of Pakistan has to bear huge
losses and it also add some benefits
including better service quality, expansion
of railways as the government has empty
pockets to invest in Pakistan Railways.

Modernize the Inter-City Rail

System
The need is to modernize the inter
city and intra city rail system in
terms of both the quality of services
on offer as well as the new
equipment being used. But it looks
like a dream of a mad man in
Pakistan or a system in art gallery.

Overcoming Fuel Deficiency

Pakistan is blessed with Coal reserves and a single
Thar Coal reserve of Sindh is about 850 Trillion Cubic
Feet which is more than Oil reserves of KSA and Iran
put together i.e. 375 billion barrels.
Chinese and other companies had not only carried out
surveys and feasibility of this project but also offered
100% investment in last 07 to 08 years but the
petroleum gang always discouraged it.

If these reserves are exploited properly then

the deficiency of fuel can be catered for the
railway.

Public Private Partnership with

China
It is time to make Public Private
Partnership with some foreign
association like China because the
privatization with Pakistani firms
results the same.
The delay in submission of dues and
lack of investment on rail routes.

Public Private Partnership with

China
Take decision to make lease agreement with
China so that they will put investment on its
routes, introduce new and high speed fleet
of locomotives along with the land acquired
by the Pakistan Railway to develop the
vegetable production on its land space
besides the rail track of 8,124 Km long to
generate revenue for the country itself and
making conditions to own system with
equipments after the tenure by Pakistan.

The Conclusion
Pakistan Railways is going towards
bankruptcy due:

to heavy liabilities
corruption in different departments of the
railways
shortage of locomotives and lack of
facilities for passengers.
poor management

In a nutshell, the time when lip-service

was paid to the development of rail
transport in this country is over, this is
the definite time to take pragmatic
steps to revitalize the Pakistan
Railways.
Corruption
in
Pakistan
Railway can only be removed by its
complete privatization.

OGDCL
Oil and Gas Development
Company Ltd.
OGDCL is a Public
Limited Company
engaged
in
exploration
and
development of Oil
and Gas resources.

Prior to OGDCL
Prior to OGDCL'semergence, exploration
activities in the country were carried out by
Pakistan Petroleum Ltd. (PPL) and Pakistan
Oilfields Ltd. (POL).
In 1952, PPL discovered a giant gas field at
Sui in Balochistan.
This discovery generated immense interest
in exploration and five major foreign oil
companies
entered
into
concession
agreements with the Government.
During the 1950s, these companies carried
out extensive geological and geophysical
surveys and drilled 47 exploratory wells.

Establishment of OGDCL
Government of Pakistan signed a long-term
loan Agreement on 04 March 1961 with the
USSR, whereby Pakistan received 27 million
Rubles to finance equipment and services of
Soviet experts for exploration.
Pursuant to the Agreement OGDC was
created under an Ordinance dated 20th
September 1961.
The
Corporation
was
charged
with
responsibility to undertake a well thought
out and systematic exploratory program and
to plan and promote Pakistan's oil and gas
prospects.
The first 10 to 15 years were devoted to
development of manpower and building of
infrastructure to undertake much larger
exploration programs.

Initial Successes
A number of donor agencies such as the
World Bank, Canadian International
Development Agency (CIDA) and the
Asian Development Bank provided the
impetus through assistance for major
development projects in the form of
loans and grants.
OGDC's concerted efforts were very
successful as they resulted in a number
of major oil and gas discoveries between
1968 and 1982.
Toot oil field was discovered in 1968
which paved the way for further
exploratory work in the North.
During the period 1970-75, the Company
reformed the strategy for updating its
equipment base and undertook a very
aggressive work program.

Transition to a self financing

entity
Due to major oil and gas discoveries in the eighties,
the Government in July 1989, offloaded the Company
from the Federal Budget allowed it to manage its
activities with self generated funds.
The financial year 1989-90, was OGDC's first year of
self-financing.
The initial target during the first year of self-financing
was generate sufficient resources to maintain the
momentum of exploration and development at a
pace visualization in the Public Sector Development
Program (PSDP) ) as well as to meet its debt servicing
obligations.
OGDC not only generated enough internal funds to
meet its debt obligations but also invested enough
resources in exploration and development to increase
the country's reserves and production.

Conversion into
Public Limited Company
Prior to 23 October 1997,
OGDCL
was
a
statutory
Corporation, and was known
as
OGDC
(Oil
&
Gas
Development Corporation).
It has been incorporated as a
Public Limited Company with
effect from 23 October 1997
and is now known as OGDCL
(Oil & Gas Development
Company Ltd.)

Initial Public
Offering
Government of Pakistan disinvested part
of its shareholding in the company in
2003.
Initially 2.5% of equity was offered to the
general public.
The said Offer received an overwhelming
response from the general public and was
recorded as a landmark transaction in the
history of Pakistans capital markets.
In December 2006, the Government of
Pakistan divested a further 10% of its
holding in the company.

Fueling the Future

The Company on September
20, 2011 celebrated its
Golden Jubilee.
The Company during the
past five decades has come
a long way from its modest
beginnings to becoming the
leading
Exploration
and
Production
Company
of
Pakistan.

Financial Over view

Lets have a look on financial performance of Oil and Gas
Development Company Ltd. from the past 12 years 2001 to 2012.
Particul 200 2002- 2003 2004 2005 200 200 2008- 2009- 2010
ars
1-02
03
-04
-05
-06 6-07 7-08 09
10
-11
Net
Profit /
Loss
(Rs. In
billions)

16.7
7

22.8
6

20.67

33.01 45.80

45.2 44.3
5
4

55.54

100

96.9
Years of Profit / Loss of OGDCL

80

60

63.53
55.5459.18
45.8 45.25
44.34

40

33.01
16.7720.6722.86
Profit / Loss
20 in billions after deductions
0

Years

59.18

63.53

201
1-12
96.9
0

OGDCLs Fields
OGDCL due to its major
activities
exploration
and development of Oil
fields have 283 wells
drilled
up
to
31.12.2012.

372 Appraisal
developed Wells.

96 Discoveries.

and

Major Fields
Balochist
KPK
an

Sindh

Punjab

Tando Alam
(Oil)

Fim Kassar (Oil) Loti (Gas)

Lashari (Oil)

Missan Kaswal
(Oil)

Uchi (Gas) Mela (Oil)

Thora (Oil)

Toot (Oil)

Pirokh
(Gas)

Sono (Oil)

Chak Noran
(Oil)
Kal (Oil)
Rajjan (Oil)
Bahu (Gas)

Misan (Oil)
Pasakhi (Oil)
Bobi (Gas)
Qadirpur
Nandpur (Gas)
(Gas)
Results in net sales for FY2011-12
Rs.197.839
and earned
Kunnar
(Oil)billionDakhni
(Oil) Profit after
Tax for FY2011-12Dhodak
Rs.96.906
(Oibillion.
/
Norai (Oil)
Gasl)

Chanda (Oil)

Nashpa (Oil)
Sheikhan
(Gas)

Financial Highlights of FY201112

Sales Revenue increased by 2.71%
to Rs.197.8 billion from Rs. 155.6
billion
Profit before taxation rose by 46.3%
to Rs.133.1 billion and profit for the
year increased by 52.5% to Rs. 96.9
billion from Rs.91.0 billion and Rs.
63.5 billion.
Earnings Per share (EPS) increased
to Rs.22.53 from Rs.14.77.
Total dividend declared at the rate of
Rs.7.25 per share from Rs.5.50 per
share.
Total assets increased to Rs. 338.3
billion from Rs.261.8 billion.

197.8
200
180
160
140
120

133.1
96.9

100
80

63.5

2010-11

60

2011-12

40
20
0

2011-12
2010-11

Excellence Awards
KSE Top Twenty Five
Companies Awards for
the sixth consecutive
years.
Best Corporate Report
Award for the fourth
consecutive year.
Environment
Excellence Award for
the third consecutive
year.

The Conclusion
All of the achievements are because of the
visionary management and right decision
making which is making beneficial the
company, firm position economically and
retain a good public image as well.

The Conclusion
In Organizations like White Elephants! i.e. PIA ,
Pakistan Railways
Perhaps people felt there was nothing more they could do,
you know? After all, how can someone be helped who
doesnt see the need?
I described such situations as,
A White Elephant everyone can see but no one
wants to deal with;
everyone hopes the problem will just go away on its
own.

Winston Churchill Quoted:

Success
is
walking
from
failure to failure
with no loss of
enthusiasm.