Degree

Master of Business Administration

Faculty / School

School of Business Studies (SBS)

Advisor

Dr. Abdul Basad Sheikh, Assistant Professor, Department of Management

Project Coordinator (External)

Ghufran Ahmed (Senior Business Analyst)

Client

Dun & Bradstreet

Committee Member 1

Dr. Zeeshan Atiq

Committee Member 2

Sameer Anees

Project Type

MBA Research Project

Keywords

Privatization, State-Owned Enterprises (SOEs), Transaction Advisory Services

Abstract / Summary

The following executive summary is an integrated overview of the findings, insights, and strategic implications from the MBA Capstone Project Dun & Bradstreet: Unlocking Advisory Opportunities During Pakistan’s Privatization. The study delves exhaustively into Pakistan's changing privatization scenario and the viability of Dun & Bradstreet Consulting (DBC) to build a robust advisory presence. Based on primary sources such as expert interviews and substantial secondary research, the report considers the structural character of Pakistan's privatization, stakeholder complexity, competitive market dynamics, and the inner readiness of DBC to compete in this high-risk area. Privatization in Pakistan has seen dramatic transformation over the past thirty years. From the politically directed, ad hoc privatizations of the 1990s, it has become an increasingly formal and institutionally structured process shaped primarily by the conditionality of international finance institutions such as the IMF and World Bank. These have the same underlying imperatives, i.e., to improve efficiency in operations, lighten the fiscal load of inefficient state-owned enterprises (SOEs) and contribute to growth for the economy through the private sector. The transition has not been smooth nonetheless with political push back, court challenges and inefficient institutions slowing the process down. The new 2024-2029 privatization master plan is the promise of action again. The plan outlines the future through sectors such as aviation, finance, energy, and real estate where milestone organizations such as Pakistan International Airlines (PIA), Zarai Taraqiati Bank Limited (ZTBL), First Women Bank Limited (FWBL), and electricity distribution companies (DISCOs) have been included as highpriority organizations. The drive for privatization in Pakistan is prompted by both domestic fiscal needs and international policy requirements. SOEs' chronic losses have put heavy pressure on the federal budget, calling for their divestment to release funds for key sectors such as healthcare and infrastructure development. At the same time, IMF-led adjustment programs call for transparent and substantial privatization to qualify for economic assistance. Both pressures have prompted policymakers to use privatization not just as a relief to the budget but also as structural reform to improve the sectoral performance and to lure foreign direct investment.

Privatization transaction process in Pakistan has a systematic value chain involving phases such as asset identification, financial and legal appraisal, structuring the transaction, ix bidding by the investors, sale completion, and post-transaction monitoring. All of them require technical assistance and advisory services, especially with regard to regulatory compliance, stakeholder interaction, financial modelling, and risk analysis. Consulting firms have an active role across the life cycle of a privatization transaction, helping the government to carry out the due diligence, develop material for investors, monitor bidding processes, and ensure the structuring of the transaction is compatible with strategic vision and the law. Their contribution is not procedural but goes to the core of transaction integrity and credibility of institutions.

Pakistan's privatization experience has been mixed. There has been success with the banking sector where organizations such as UBL and HBL saw substantial post-privatization improvements in profitability and service levels. In the cement and telecom sectors, the privatized companies have shown strength, response to need, and competitiveness. However, failed attempts like those relating to Pakistan Steel Mills (PSM) and the Karachi Electric Supply Corporation (KESC) show the dangers of weak regulation, unclear transaction structures, and poor post-sale monitoring. These differing instances highlight the need for strong advisory engagement and good regulatory frameworks to guarantee that privatization results create longterm value. Pakistan's advisory marketplace is competitive with high-profile international firms such as PwC, EY, JP Morgan, Alvarez & Marsal, and Citigroup, and regional players such as BDO. The firms tend to compete on sectoral expertise, understanding of Pakistan's regulatory requirements, and their capacity to deliver pricing models to suit the government’s limitations. The allocation of around PKR 7.73 billion for transactional advisory service for the next few years demonstrates the scale of the opportunity. Big-ticket privatization deals such as those of PIA, Roosevelt Hotel, FWBL, and several DISCOs are likely to fetch hefty advisory charges, presenting lucrative opportunities for both local and international firms. The consulting fee arrangements generally involve milestone payments and success fees tied to performance, which encourage high-quality results.

In this instance, Dun & Bradstreet Consulting, although not yet pre-qualified to be a transaction adviser in Pakistan, has strong potential. The firm's strengths are anchored in its integrated advice model blending strategy, operational restructuring, and finance advice. DBC has an excellent reputation in the Gulf Cooperation Council (GCC) states and South Asia, primarily through mandates including public-private partnerships, utility efficiency, and x investment preparation. Its capacity to handle transactions along the entire value chain—with initial valuation through post-deal integration—makes it a strong candidate for advice positions in Pakistan's privatization drive. Nevertheless, there are limitations to capitalize on this potential to the fullest. DBC's model is well-suited to the Government of Pakistan's strategic needs, including the introduction of turnaround solutions, rehabilitation of underperforming SOEs, and creation of transparency-led results. Its sectoral strengths in power and finance only increase the aptness. Nevertheless, DBC's pricing model—largely success-fee based between 2%—does not match the GoP's existing preference for milestone-designed fee structures and 1% plus-capped success incentives. Correct adjustment of its commercial model would become critical to compete.

A SWOT analysis of DBC identifies strong strengths and weaknesses. Among strengths is the firm's provision of integrated advisory services involving strategic planning, operational transformation, financial modelling, and restructuring of the organization. It taps global expertise with local understanding, the result of its history working in comparable markets. Leadership is composed of professionals with track records of work in regulated sectors, allowing the firm to handle public-sector challenges well. Nevertheless, it is not yet listed among prequalified advisers, nor is it well-known enough to have strong brand presence in the public sector of Pakistan. Additionally, the existing business model is not optimized for public-sector procurement teams. These areas of weakness can be corrected by entering the marketplace through strategic alliances, reframing fee structures, and establishing local presence through focused pilot projects. DBC has significant opportunities. The pipeline of privatization offers more than 24 highvalue state-owned enterprises across the 2024-2029 horizon, spanning energy, finance, and infrastructure sectors. Also, firms with active engagement strategies can shape future initial public offer listings, particularly through channels such as the Special Investment Facilitation Council (SIFC). The IMF and World Bank's active presence guarantees increased transparency and systematic appraisal, raising the likelihood of qualified selection of advisors. However, dangers loom large. Political uncertainty, the intricacies of regulations, and uncertain timeframes have the power to sabotage transactions. Also, excessive price sensitivity in selection processes means technically superior firms can lose the bid even if their price proposals are competitive.

In order to maximize this moment, DBC would need to undertake various strategies. To start with, it needs to undertake consortium-level market entrance through collaboration with prequalified domestic or foreign firms. This would enhance its technical score and ensure conformity to GoP procurement standards. Second, it needs to reshape its pricing strategy through the introduction of hybrid structures combining milestone payments with capped success fees. Third, DBC needs to engage all the key stakeholders across the Privatization Commission, multilateral donors, and sectoral ministries to gain their trust and establish itself as a credible long-term business associate. Fourth, it should start with comparatively smaller mandates in the finance sector—like FWBL or HBFCL—to develop a track record. Fifth, the establishment of a public finance specific unit within the firm would increase the level of institutional readiness for current and future public-sector transactions. In conclusion, the Pakistan privatization agenda provides a distinctive but challenging chance for consulting firms such as DBC. The payoffs are high, but so are the challenges— everything from political risk to price restrictions and stakeholder imperatives. With the technical strength, strategic vision, and regional understanding, there is no reason DBC can’t succeed. But it’s going to take the firm’s ability to adjust, to get involved enthusiastically, and to gain credibility operating in a competitive, dynamic marketplace. If it can proceed pragmatically to market, develop strategic partnerships, and match commercial frameworks to state imperatives, there is no reason why DBC can’t become the preeminent participant on Pakistan’s public-sector IT transformation journey.

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Available for download on Wednesday, October 11, 2028

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