Recasting PSEs boards: Prime Minister tells ministries to submit large panels of experts

Prime Minister Yousaf Raza Gilani has directed all Ministries/Divisions to send larger panels of experts, independent and knowledgeable persons, for recasting independent boards of directors (BoDs) for the public sector enterprises (PSEs) which have turned into ''black holes'', sources in Finance Ministry told Business Recorder.
The government will also hire foreign consultants to finalise the restructuring of PSEs, which absorb nearly Rs 300 billion of a poor nation. "Larger panels of knowledgeable and professional persons should be submitted to Prime Minister, through the Cabinet Committee on Restructuring (CCoR), for approval so as to complete the process by April 30, 2010.
The BoDs shall recommend a panel of highly professional men of integrity for appointment as the CEOs for these PSEs and also recommend terms and conditions for CEOs, to be approved by the Prime Minister," sources quoted Prime Minister as issuing directions in the Cabinet meeting on March 10, 2010.
The Cabinet has approved restructuring of Pakistan International Airlines (PIA), Pakistan Steel Mills (PSM), Pakistan Electric Power Company (Pepco), Pakistan Railways (PR), National Highway Authority (NHA), Pakistan Agricultural Storage and Services Corporation (Passco), Trading Corporation of Pakistan (TCP) and Utility Stores Corporation (USC).
The CcoR, headed by former Finance Minister, had deliberated on a framework for restructuring the PSEs had and finalised the following roadmap to proceed with the restructuring plan: (i) Formation of an independent and professional Board of Directors (BOD) by 30th March 2010 in each PSE; (ii) hiring of professional CEOs (nominated by the respective BOD) by 30th May 2010; (iii) approval of restructuring plans of respective PSEs by CCoR by 31st August 2010; and (iv) start implementation of the approved restructuring plans under the new independent BOD by 1st of September 2010.
The roadmap will, however, be pursued in co-ordination with the concerned Ministries and also the provincial government, before seeking final approval of the Cabinet. The coordination and line-institution in this activity will continue to be the CCoR.
Sources said that Finance Ministry had sought approval of the Prime Minister to authorise CCoR for finalisation of BoDs of PSEs and the roadmap for restructuring of the PSEs. However, the Prime Minister directed that the matter be placed before the Cabinet for consideration and approval.
Sources said that Cabinet members discussed at length various aspects of the objectives of the proposal and also the roadmap, and termed it as a pressing need of the hour to streamline and restructure the PSEs, which had turned into "black-holes" and source of a continued drain on the national economy.
The Cabinet observed that the purpose of restructuring of these enterprises was to improve governance and management of these entities and to make them profitable so as to divert the national resources for providing relief to the people of Pakistan.
After detailed discussion, the Cabinet approved the proposed roadmap, by advancing the timelines by 30 days, for reorganisation of the Boards of Directors of the identified PSEs, as independent fora, which shall recommend the appointment of professional CEOs.
Sources said that final restructuring would be recommended by the respective CEOs to be thrashed out by the BoDs and the CCoR and finally approved by the Cabinet. The reorganised set-up would be operationalised by 1st October, 2010. The Ministries/Divisions will, if required, co-opt/get support from foreign/overseas/local financial advisers in consultation with the Privatisation Commission.