Pakistan’s telecom industry has urged the government to abolish a procurement rule that allows direct government-to-government contracts. The industry says the provision is limiting opportunities for private companies in IT, telecom, and digital services projects. The Telecom Operators Association (TOA) raised the issue in a letter sent to Finance Minister Muhammad Aurangzeb, Planning Minister Ahsan Iqbal, and IT and Telecom Minister Shaza Fatima Khawaja.
TOA Secretary General Kamal Ahmed called for the repeal of Clause 42(f) of the Public Procurement Rules, 2004. The clause allows government agencies to directly award contracts to state-owned entities for urgent projects considered important for the public interest.
According to the association, federal and provincial governments strengthened existing state-owned enterprises after the 2021 amendment. They also created dozens of new entities that could receive government projects through direct G2G arrangements.
TOA said many IT and telecom projects have reportedly been awarded without competitive bidding during the past five years. The association argued that this practice has significantly reduced business opportunities for private companies.
The telecom sector has invested billions of rupees in Pakistan over the past two decades. These companies have also made major contributions to the national exchequer through taxes and other payments. Meanwhile, telecom operators are moving beyond traditional connectivity services. They are investing in data centres, cloud computing, artificial intelligence, and other digital technologies.
TOA said Pakistan needs a strong domestic technology ecosystem to help local companies expand internationally. However, it warned that government spending on available local services is increasingly going to government-owned companies.
The association believes this approach limits opportunities for Pakistani technology companies. Without local projects, these companies may struggle to test and validate their products before entering international markets.
TOA also raised concerns about an uneven competitive environment. It alleged that some state-linked entities could receive regulatory exemptions, preferential licensing, or implicit government guarantees. Private companies do not have access to similar advantages, the association said. As a result, TOA argued that government-backed entities can gain an unfair advantage in public-sector projects.
The association also warned that reduced competition could hurt innovation and efficiency. Companies may have fewer reasons to improve services when they receive contracts without competing openly.
TOA highlighted another concern involving job creation for Pakistan’s educated youth. It said fewer opportunities for small and medium-sized businesses could slow their growth and limit employment opportunities.
The association also questioned reports that state-owned enterprises subcontract G2G projects after securing contracts without competitive bidding. TOA said this practice could potentially bypass transparency and accountability requirements.
The group referred to Prime Minister Shehbaz Sharif’s position that there is “no business of government in running a business.” It argued that many SOEs were created using taxpayers’ money but later entered markets alongside private companies.
According to TOA, these entities can then receive preferential access to government-funded projects. The association believes this creates additional pressure on private businesses that already compete without similar advantages.
TOA has asked the government to repeal Clause 42(f) of the PPRA Rules. It wants state-owned enterprises to compete equally with private companies for government-funded IT, telecom, and digital services projects.
“The SOEs should compete in government-funded projects just like any private sector entity,” the association said. TOA added that removing the provision would support fair competition and serve Pakistan’s broader national interest.
