SOEs to be privatized through strategic sales, concessions: Shamshad Akhtar

December 13, 2023 (MLN): The Privatization Commission will undertake the privatization of selected Pubic Sector Enterprises/State Owned Enterprises (SOEs) using various modes such as strategic sales and concessions, Finance Minister Dr. Shamshad Akhtar said in an interview with the Institute of Cost and Management Accountants of Pakistan (ICMA).

The initiatives encompass assessing privatization options for DISCOs, exploring restructuring possibilities for PIA-CL, and conducting unbundling studies for Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company Limited (SSGPL).

Pakistan has around 200 State Owned Enterprises (SOEs) that are engaged in a diverse ranged activities.

These SOEs, however, are facing financial losses due to various factors. including poor management, inadequate strategic planning, lack of transparency and accountability, absence of a consistent and overarching policy, and institutional malpractices.

During the fiscal year 2019-20, the SOEs collectively incurred a significant loss amounting to Rs485 billion.

The Finance Minister said that the Government has taken various steps to bring legislative, Institutional and administrative reforms in the SOEs, including timely determination and full cost recovery of tariffs, and reforms in the accountability structure of the SOEs.

To note, the SOEs (Governance and Operations) Act, 2023 was promulgated on February 02, 2023.

The salient features of the Act include nominations of independent directors institutionalized, majority of Independent directors, security of tenure: removal criteria defined, establishment of CMU, separation of office of Chairman from the CEO office, PPM rules exemption, and enhanced board Independence -appointment of CEOs and policy directions to be issued with the approval of Cabinet.

The government has established a Cabinet Committee on SOEs (CCoSOEs) under the SOEs Act, 2023 to periodically review the performance of the SOEs, she said.

Moreover, CMU has been established through an interim placement in the Finance Division, which will maintain an electronic database of the financial and operational performance of SOEs, information related to business plans, half-yearly and annual SOEs reports, and any other information prescribed in the SOEs Policy.

Furthermore, the government has developed the SOEs (Ownership and Management) Policy, 2023, in consultation with line Ministries/Divisions, SOEs, and stakeholders, and is currently awaiting Cabinet approval.

The government has embarked on a tourney to implement gradual structural reforms within the governance framework of all State-Owned Enterprises (SOEs), aligning them with the SOEs Act of 2023.

As part of this initiative, the first phase involved successfully amending the Acts of four SOEs: the National Highway Authority, Pakistan Post Office, Pakistan Broadcasting Corporation, and Pakistan National Shipping Corporation, she said.

These amendments have been carried out successfully and are at an advanced stage of promulgation.

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