Finance Minister Unveils Policy to Rescue Financially Unsustainable State-Owned Entities

Caretaker Finance Minister Dr. Shamshad Akhtar on Thursday shared the salient features of the State-Owned Enterprises (SOEs) Policy.

During a press conference held in Islamabad, the finance minister explained that the new policy aims to revitalize certain state-owned enterprises while also considering privatization for others. Moreover, chief executive officers and independent directors will be nominated. Importantly, ad-hoc interventions will be prohibited, preventing ministries from issuing directives to SOEs.

She added that any exemptions from PPRA Rules will be granted upon due approval of the federal cabinet, and electronic financial data will be diligently maintained for all organizations.

Dr. Akhtar acknowledged that the performance of many government-owned institutions had not met expectations and attributed associated losses to mismanagement within these organizations. The Ministry of Finance is working diligently to address this issue and has prepared a draft policy for SOEs, which will undergo further consultation, she added.

Included among these entities are 85 commercial entities, with 20 hailing from the power sector. The finance minister revealed that a list of the top ten profitable and top ten loss-making companies had been compiled. To ensure effective governance, independent board members will be appointed through the proposed policy.

No. Top 10 Profit-Making SOEs FY2020
1 Oil and Gas Development Company Limited Rs. 100.08 billion
2 Pakistan Petroleum Limited Rs. 49.4 billion
3 National Bank of Pakistan Rs. 30.6 billion
4 Government Holdings (Private) Limited Rs. 29.8 billion
5 National Power Parks Management Rs. 28 billion
6 Port Qasim Authority Rs. 15.4 billion
7 National Transmission and Despatch Company Rs. 9.3 billion
8 Pak Kuwait Investment Company (Private) Limited Rs. 6.3 billion
9 Faisalabad Electric Supply Company Limited Rs. 6.08 billion
10 Pakistan Agricultural Storage & Services Corporation Limited Rs. 6.02 billion

 

No. Top 10 Loss-Making SOEs FY2020
1 Quetta Electric Supply Company Rs. 108.5 billion
2 National Highway Authority Rs. 94.3 billion
3 Pakistan Railways Rs. 50.2 billion
4 Sukkur Electric Power Company Rs. 40.8 billion
5 Pakistan International Airlines Rs. 36.07 billion
6 SSGCL Rs. 21.4 billion
7 Pakistan Steel Mills Rs. 20.6 billion
8 HESCO Rs. 17.7 billion
9 Pakistan State Oil Company Rs. 14.8 billion
10 Peshawar Electric Supply Company Rs. 14.6 billion

 

Dr Akhtar noted that the State Owned Enterprises Act, passed by the previous government, laid the foundation for the present administration’s policy structure and design concerning these enterprises. The sectors under consideration include energy, telecommunication, and transport institutions.

The caretaker finance minister clarified that any interference in these institutions on an ad-hoc basis would not be tolerated. She said the government intends to build upon past successes and retain control over strategic institutions while considering restructuring or privatization for others.

To monitor the progress and reduction of losses in these institutions, a rigorous monitoring procedure will be established. Additionally, any exemptions required from the PPRA Rules will be subject to approval by the Cabinet on a case-by-case basis.

The minister also pointed out the substantial losses incurred by SOEs, reaching a staggering Rs. 500 billion by 2020. She argued that this financial burden was the responsibility of the Ministry of Finance, which aimed to assist the relevant ministries in tackling this issue.

Dr. Shamshad Akhtar reiterated the government’s commitment to rectify the financial woes of government-owned enterprises, emphasizing that this endeavor is vital for Pakistan’s continued development and economic stability. The government will continue working towards a more efficient and accountable system for these enterprises, keeping the nation’s best interests in mind, she added.



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