Govt rightsizing: 33 SOEs to be closed in first phase

ISLAMABAD: The federal government has decided to close 33 State Owned Entities (SOEs), abolish or declare 60 percent of vacant regulator posts; i.e., 150,000, outsourcing of non-core services and rightsizing of six ministries in the first phase, well-informed sources told Business Recorder.

On August 27, 2024, the Cabinet Division noted that the Prime Minister had constituted a “Committee on the Rightsizing of the Federal Government” through a notification of June 21, 2024 with the following Terms of Reference (ToRs): (i) propose architecture for functions of the federal government that can be undertaken in private mode; (ii) ascertain functions requiring public finances which can be performed in private mode; and, analyze whether remaining functions with appropriate and economical architecture corresponding to them;(ii) determine functions which are entirely provincial with no international obligation and without affecting common market principle; (iii) recommend concrete plan with clear way forward and methodology along with ascertainment to safeguard assets, human resources and other ancillary issues; and (iv) and any other issue relevant to the scope of work assigned to the committee.

Federal cabinet approves merger, dissolution of 82 SOEs

It was added that for the first phase of rightsizing of the Federal Government, the Committee had selected the following ministries/Divisions: (i) Capital Administration & Development (dysfunctional); (ii) Industries & Production; (iii) Information Technology & Telecommunication; (iv) Kashmir Affairs & Gilgit-Baltistan; (v) National Health Services, Regulations & Coordination; and (vi) States & Frontier Regions.

Elaborating further on the process, the Cabinet was apprised that the Committee held extensive consultations with the Ministries and Administrative Secretaries of the Ministries/Divisions under review as well as other key stakeholders, and had also examined various Federal Government entities against the criteria specified in its Terms of Reference.

Moreover, the Committee had also looked into the potential financial, institutional and human resource impact of different rightsizing options and implementation plans. International best practices were also taken into account along with the opinion of an online team of consultants provided by the World Bank.

A subcommittee carried out more granular analyses of the proposals on possible mergers, transfers, liquidation or privatization of the various organizational entities. During these deliberations, the input provided by all stakeholders was given careful consideration.

It was added that following a collaborative and consensus-building approach, the Committee formulated proposals for rightsizing, which were well-aligned with the overarching objective of the institutional reform initiated by the Federal Government.

These proposals were presented to the Prime Minister on August 16, 2024 who after a detailed review, approved the recommendations of the Committee with certain refinements, for which directions were also issued by the Prime Minister’s Office on August 19, 2024. The proposal for rightsizing of the federal government in the first phase was finalized accordingly.

According to the proposal: (i) 60 percent of vacant regular posts (up to 150,000) were being recommended to be abolished or declared dying posts as a result of first phase of rightsizing exercise; (ii) outsourcing of general, non-core services (cleaning, plumbing, gardening etc), resulting in drastic reduction in size of BPS 1-16 staff; (iii) contingency posts were recommended to be eliminated; (iv) a committee to be constituted to entertain the representation of employees aggrieved as a consequence of the rightsizing exercise, preferably having quasi-judicial powers, represented by retired judges of superior courts, and Law and Justice Division was assigned to propose the Committee and its Terms of References;(v) amendments in the Civil Servants Act, 1973 to be placed before the Cabinet Committee on Legislative Cases Division; (vi) a committee on Civil Service Reforms shall be constituted with inter alia representation from the Establishment Division, Cabinet Division, Law & Justice Division and Finance Division to work in tandem with the Rightsizing Committee already constituted for the purpose; and (vii) a two week time period was proposed for finalization of the plan for implementation of the decisions of the Committee on Rightsizing of the federal government.

Summing up the first phase of rightsizing of the first five ministries, Minister for Finance further stated that out of total 82 entities 33 were being recommended to be closed, privatised or transferred whereas 9 would be reduced through merger.

The Cabinet was further apprised that the following shall be included in the second phase of rightsizing: (i) Board of Investment; (ii) Ministry of Commerce; (iii) National Food Security and Research; (iv) Housing and Works; and (v) Science and Technology.

After detailed discussion, the Cabinet approved recommendations of the Committee on Rightsizing of the federal government (phase-1).

The Cabinet also decided that Minister for Planning, Development and Special Initiatives would head the Committee on Civil Service Reforms to be notified by the Establishment Division.

The Committee would have representation inter alia from Establishment Division, Cabinet Division, Law & Justice Division and Finance Division. The Committee would work in tandem with the committee on rightsizing of the federal government and give its recommendations within four weeks.

The Cabinet directed to finalize the implementation plan for the rightsizing of the federal government (Phase-1) within two weeks’ time.

Copyright Business Recorder, 2024