ANALYSIS OF THE CONCEPT OF PUBLIC PRIVATE PARTNERSHIP AND DEVELOPMENT OF A MODEL FOR DEFENCE INDUSTRY OF PAKISTAN TO UTILIZE ITS SURPLUS CAPACITY

Abstract

The present financial condition of State owned public enterprises of Government of Pakistan warrants complete relook at economic viability of these outfits. Defence industry of Pakistan, one of the major sector which is rich in human resources and technical capabilities/expertise. However, it is not able to utilize/optimize its potential. This gap between capabilities and its utilization demands out of the box thinking to enable transformation into a profit earning enterprise. Currently Government of Pakistan is financially burdened due to low productivity/profitability in public sector organization specially in large scale manufacturing sector such as Pakistan Steel,, HMC and defense production enterprises. To enhance the productivity/profitability in public sector, and to reduce burden on government expenditure, a workable model of Partnership with Private sector is required to achieve the desired productivity/ efficiency. Public Private Partnership (PPP) means a commercial transaction between a private party and an institution by which the private party:- • Performs an institutional function on behalf of the institution; and/or • Assumes the use of public property for its own commercial purposes; Detailed data was collected of HIT Factories’ surplus capacity in terms of man and machine hours available after meeting its already assigned targets. HIT is a defence sector make to order type organization which specifically cater for demands of defence forces of Pakistan. From the data collected from the target industry, it has been observed that there is a • Large surplus capacity available in terms of man and machine hours in HIT • The man and machinery is partially utilized during a single shift of eight hours only, hence technical facilities can be utilized in evening and night shifts for commercial activity. • PPP MODEL developed for HIT from this study has enhanced the productivity/ profitability tremendously. Developed PPP model can be successfully employed in public sector organizations with their arrangements