Pakistan moves bills to place major SOEs under stricter governance to meet IMF benchmark

Pakistan is preparing to introduce legislation in parliament to bring more than a dozen major state-owned entities under standard statutory and governance rules in an effort to meet an International Monetary Fund (IMF) structural benchmark before the end of the month, Dawn reported. 

The legislation is aimed at completing a previously missed reform commitment under the ongoing IMF programme.

One bill relates to large state-owned companies previously placed under the Pakistan Sovereign Wealth Fund, including Oil and Gas Development Company Limited, Pakistan Petroleum Limited, Mari Petroleum, National Bank of Pakistan, Pakistan Development Fund, Government Holdings Limited and the Neelum-Jhelum Hydropower project.

These companies were earlier subject to regulatory oversight under the Securities and Exchange Commission of Pakistan but were granted exemptions after being placed under the sovereign wealth structure linked to expected foreign investment. The investment plans did not proceed, but governance exemptions remained, raising concerns during IMF discussions.

A second legislative package will apply to other public sector entities including Pakistan Broadcasting Corporation, Pakistan National Shipping Corporation, Pakistan Post and Pakistan Television. 

The proposed changes would require these organisations to follow corporate reporting and governance standards similar to other public companies, including majority independent boards.

An IMF mission led by Iva Petrova has been holding discussions with Pakistani authorities since Feb 25 for the third review of the Extended Fund Facility and the second review under the Resilience and Sustainability Facility. 

Officials said discussions on the next federal budget have been partially postponed due to regional uncertainty and economic volatility, with further talks expected to take place in May.