Cabinet to approve new state-owned enterprises policy

Final draft to be presented to Federal Cabinet in next meeting

ISLAMABAD: The federal cabinet is likely to approve State-Owned Enterprises Policy, 2023 to improve performance of loss making entities. 

According to details, the meeting of the Cabinet Committee on State-Owned Enterprises (CCoSOE) was held at the Finance Division today under the chair of the caretaker finance minister Dr Shamshad Akhtar.

The principal agenda of the meeting was to conduct a comprehensive review and finalization of the State-Owned Enterprises Policy 2023, an initiative aimed at reforming and revitalizing Pakistan’s state-owned enterprises.

The Cabinet Committee engaged in constructive discussions, reviewing key elements of the policy in light of suggestions of the previous meetings, including governance structures, performance, and accountability mechanisms.

The finance minister stated that the State-Owned Enterprises Policy, 2023 represents a critical step towards restructuring and modernizing the state-owned enterprises and the economy at large. She said that the objective is to reduce the size of SOEs in the public sector as well as to make those which remain in the public sector to be more competitive, accountable, and responsive to the needs of our citizens. This policy will pave the way for a more efficient utilization of public resources and will enhance the overall economic landscape of Pakistan.

The finance minister underlined that the inconsistencies, contradictions and ambiguities in the relevant laws and rules have to be corrected to improve corporate governance in the SOEs. She said that the code of conduct for Boards of Governance in the SoEs have to be formulated and implemented in letter and in spirit.

The Finance Minister also emphasized the importance of enhanced scrutiny of the “fit and proper” criterion by the regulators.

Dr. Shamshad Akhtar underscored that the mismanagement of the SOEs cannot be allowed to continue. She said that dividends have to be improved through enhanced efficiency and transparency.

The Finance Minister said that the Cabinet Committee on State-owned Enterprises and the Central Monitoring Unit has to play a major role to ensure business plans of the SOEs are in line with the sectoral priorities.

According to details, the final draft of State-Owned Enterprises Policy 2023 will be presented to the federal cabinet in the next meeting.

Recently, the Caretaker finance minister had informed that the loss of government-owned SOEs had exceeded Rs 500 billion in the year 2020 which was Rs 143 billion in the year 2019. She also said that the Ministry of Finance had been providing assistance in order to keep many SOEs in good condition.

She disclosed that the top ten loss making SOEs in 2019 were: Quetta Electric supply company (Rs 108.5 billion), National Highway Authority Rs (94.3 billion), Pakistan Railway (Rs 200 million), Sukkur Electric power company (Rs 40.8 billion), Pakistan International Airlines (36.07 billion), Sui Southern Gas Company Limited (Rs 21.4 billion), Pakistan Steel Mills Rs (20.6 billion), Hyderabad Electric Supply Company (Rs 17.7 billion), Pakistan State oil company (Rs 14.8 billion) and Peshawar Electric supply company (Rs 14.6 billion).

On the other hand, the top profit making SOEs included Oil and Gas Development Company Limited (Rs 100 billion), Pakistan Petroleum Limited (Rs 49.4 billion), National Bank of Pakistan (Rs 30 billion), Government Holdings Pvt Limited (Rs 28.8 billion), National Power Parks Management (Rs 28 billion), and Port Qasim Authority (Rs 15 billion).

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