TIP Revival - Dawn May 12, 2019

TIP revival a daunting task
 By Muhammad Sadaqat | 5/12/2019 12:00:00 AM
HARIPUR: The revival of Telephone Industries of Pakistan (TIP), a subsidiary of the Ministry of Information Technology, for making it a profit earning and better job offering government entity has always been a challenge both for the policy makers and its workers.

Those at the helm of affairs at the national level and politicians have time and again pledged to play their role in bringing an almostsickunitof TIP,locatedin Haripur, back on its feet, but their efforts, if any, failed to produce the desired results. As such, uncertainty prevails among hundreds of both its direct and indirect beneficiaries.

Sid by side the depreciating value of TIP`s assets especially the machinery lying unused and the salaries and pensions of its workers and utility bills are a constant headache for the government that so far could not take steps for its revival.

Commissioned as State Owned Enterprise in 1953, TIP started its producdon during 1955 to meet the needs of the country`s Telecommunication Switching Equipment. Its skilled manpower and engineers were engagedin planning,producing, installing and commissioning of telephone exchanges across the country that helped in saving millions in foreign exchange by manufacturing telecom-related equipment which were imperative for boosting the national economy.

According to official documents, the TIP, which later became a subsidiary of PTCL, once enjoyed almost complete dominance in the field of manual exchange manufacturing system which continued till late 80s when the digital technology was introduced in the country. TheTIP has the capacity to fulfil 71 per cent of the country`s needs in telecom sector by manufacturing 500,000 lines of digital exchanges, 450,000 telephone sets, 200 plus container exchanges, 36,000km of drop wire, 300 telecom towers and accessories for making both manual and digital telecommunication system operational in the country annually.

TIP had also pioneered in manufacturing the country`s first 97 per cent indigenous electricity meter `Almeezan` in early 90s with production capacity of 150,000 single-phase meters a year. According to a review of of ficial documents by this correspondent, the real problem stemmed from ignoring the crucial need of Research and Development (R&D) for getting the manufacturing process of this gigantic SOE attuned to modern technological needs.

The change of technology of telecom-related products and deep-seated culture of kickbacks shrank the market of TIP`s products and afterwards foreign investing companies captured the telecom market.

This was the time, according to an official document, that the TIP`s administration failed to make pace with the changing trends and stuck to its decadesold production line. The change of technology cost this unit of about 4,000 employees and over 100,000 indirect beneficiaries so dearly that its annual sales dropped to the lowest level of Rs70 million against its expenses of Rs700 million with huge amount of negative equity of Rs1.8 billion and accumulated loss rising to Rs2.6 billion by August 2012. The downslide continued till this day and the sales dropped to almost zero by March 2019 as the government has not yet come up with a practical solution to the crisis.According to bank sources, the TIP obtained an overdraft of Rs885 million from the National Bank of Pakistan during 1996 for launch of a new project and Voluntary Separation Scheme of its employees, but owing to its negative equity conditions and bearinglossitfailed to continue debt servicing and the amount has now risen to Rs3.89 billion.

`Mismanagement and lack of poor future vision and government support are the key factors responsible for the TIP`s downfall,` said Naseem, a former worker of the entity.

Tahir Jan, TIP Employees and Workers Union president, claimed that there was no match of skilled manpower and modern machinery, which was now lying almost unutilised and rusting due to lack of manufacturing process and maintenance. He said thatTIP sullhad the capacity of meeting the needs of both telecom and energy sectors.

When contacted, former managing director of TIP Engineer Javed Safdar said that a ñvemember expert committee from the Ministry of Information Technology and TIP had devised a revitalisation plan during 2009 under which diversification of the manufacturing portfolio of products was termed imperative for its revival. He said that the committee had approved creation of five separate commercial business units under corporate headquarterswhichincludedtelephone sets, printed circuit boards, energy meters, solar power system and telecom towers.

Referring to another revitalisation report of year 2012, the former MD said that for avoiding closure of TIP and restoring it as a productive unit, a joint venture/investment could bring the f actory out of the prevailing situation. He said that its productsincluded energy meters, mobile handsets, solar power systems, telecom towers, telephone sets, printed circuit boards, batteries and UPS units. He said that TIP had the available infrastructure to manufacture such products at massive level.

He said that for this purpose Rs3.2 billion was required from the government.

He said that the machinery and skilled manpower could be better engaged for manufacturing of Electronic Voting Machines and furniture industry for creating new jobs and protecting TIP from collapse.

Another document revealed that despite several reviews and directions for revitalisation and upgradation of technology the TIP management and the ministry f ailed to come up with a workable plan for its revival. The depreciation of assets especially the machinery, which was estimated at Rs990 million and not being used for manufacturing, is also a matter of concern.

The documents show that the government had during 2004-05 placed the TIP on privatisation list, but failed to attract the investors. Once again, the government has brought it back onthe priority list of units to be privatised, but the plan is yet to be materiliased owing to heavy liabilities.

Experts say that if the government is serious to avoid closure of this SOE it could freeze the bank loans from getting increased with the burden of monthly markup for certain period, or get them written off and inject equity of at least Rs3 billion as bailout package that is possible with the engagement of private or government investors.

When contacted, TIP managing director Taimur Khan confirmed that it was in crisis and there were multiple reasons for this.

He said that the IT Ministry had been disbursing Rs500 million annually to the TIP on account of salaries, pensions and utility charges. He said that the government was serious about TIP`s revival and creating new job opportunities and efforts were being made to invite national, international and local investors for a joint venture. He said that at local level some government institutions were also beingoffered the services ofTIP for making parts of their strategic products.