ISLAMABAD: A parliamentary panel was informed on Friday that out of a total 29 institutions affiliated with Ministry of Industries and Production 16 are under review for closure or privatisation and the remaining are being evaluated to be run through public-private partnership.
The Senate Standing Committee on Industries and Production, which met here with Aon Abbas Buppi in the chair, discussed the Ministry of Industries and Production’s ongoing rightsizing and privatisation initiatives.
Minister for Industries and Production Rana Tanveer Hussain briefed the panel on the progress and future direction of these efforts, alongside key inputs from the Ministry’s senior officials.
The minister said that the government has already made strides in securing cabinet approvals for key decisions and is now focused on reviewing the performance of these institutions over the next six months.
He emphasised that institutions showing sub par performance would face closure, underscoring the government’s commitment to improving operational efficiency within the public sector.
Additional Secretary Asif Saeed Khan for the ministry said that six to seven institutions play a pivotal role in the nation’s industrial ecosystem and their closure would directly affect the industry.
Among the institutions that will remain under government control is the Small and Medium Enterprises Development Authority (SMEDA), which was singled out as a critical body for the ministry’s mandate.
Khan also provided a breakdown of the proposed rightsizing measures, including plans to close or privatise 16 institutions.
Notably, the cabinet has already decided to close down Section 42 companies, though this decision is currently under review following a request to withdraw.
The rightsizing committee is focused on ensuring that any changes made align with both economic and industrial priorities.
The committee received a comprehensive update on the asset portfolios of key institutions under the ministry’s oversight.
Pakistan Engineering Company, which owns 1,927 kanals of land valued at Rs19 billion, faces significant challenges with a debt burden of Rs7-8 billion.
Similarly, Republic Motors, with assets worth Rs10 billion, is grappling with asset occupation by 28 individuals, with plans to involve a specialised legal team for recovery.
The value of assets held by Sindh Engineering Private Company and Marafco Company was also discussed, with total asset valuations nearing Rs12 billion across these entities.
The Utility Stores Corporation, a vital player in the retail distribution network, was also a focal point of the discussion. Despite the government’s initial decision to close the Utility Stores, this has been withdrawn, and the stores have now been included in the privatisation list.
In August, the Privatization Commission hired a financial advisor to assist in the privatisation process, which is expected to proceed in phases.
Notably, 2,400 of the corporation’s 4,300 stores are currently operating at a loss, primarily in Balochistan and Gilgit-Baltistan, while the remaining 1,900 stores are profitable.
The minister emphasised that, despite the challenges, the government is committed to supporting the country’s industrial and retail sectors by implementing a clear and strategic rightsizing policy. “The rightsizing committee has made substantial progress, and we will continue to closely monitor the performance of these institutions over the next six months. If they fail to perform, we will not hesitate to close them down,” he added.
As the government progresses with its rightsizing and privatization plans, Senator Buppi reiterated the importance of ensuring that critical institutions like those in Multan are not shut down prematurely.
He called for a balanced approach that would protect jobs and ensure the continued operation of vital industries.
The committee will reconvene in the coming months to review the progress of the rightsizing efforts and the financial performance of key institutions.
Copyright Business Recorder, 2024
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