‘Poor’ performance: Cabinet assails MoC bodies, trade missions

ISLAMABAD: The Federal Cabinet has criticized the performance of Ministry of Commerce (MoC) organizations, including trade missions and suggested the privatization of the Trade and Development Authority of Pakistan (TDAP), according to well-informed sources.

The Cabinet Committee on Rightsizing of Federal Government recently noted that as directed by the Prime Minister a ‘Committee on the Rightsizing of the Federal Government’ was constituted on June 21, 2024.

The following Terms of Reference (ToRs) were assigned to the committee:

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(i) propose architecture for functions of the Federal Government that can be undertaken in private mode; ascertain functions requiring public finances which can be performed in private mode; and, analyse whether remaining functions have 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; (iv) analysis of the government expenditure, identifying areas of the improvement and bringing allocative and utilization efficiency; and

(v) Any other issue relevant to the scope of work assigned to the committee.

The Cabinet was further informed that in the first phase of rightsizing of the Federal Government, the Committee had selected the following Ministries: (i) CDA(dysfunctional) ;(ii) Industries and Production;(iii) Information Technology and Telecom ;(iv) Kashmir Affairs and Gilgit-Baltistan; (v) National Health Services, Regulations and Coordination; and (vi) State and Frontier Region.

It was further informed that the proposals of the Committee relating to four Divisions/entities were approved by the Cabinet on August 27, 2024 and were currently under implementation, whereas in the second phase, the Committee had taken up the following Ministries along with the BoI (i) Science and Technology; (ii) Commerce; (iii) Housing and Works; and (iv) National Food Security and Research.

The Cabinet was apprised that although the Board of Investment (BoI) could not provide any concrete proposal on rightsizing owing to its current institutional flux, the other four Ministries had provided their proposals along with relevant data.

Similar to the first phase, the committee held extensive consultations with the Ministers and Administrative secretaries of the four concerned Ministries, as well as other key stakeholders.

The Committee also examined the various entities under those Ministries, against the criteria specified in its Terms of Reference.

Furthermore, the committee looked into the potential financial, institutional and human resource impact of different rightsizing options and implementation plans. And international best practices were also taken into account.

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

It was highlighted that based on the collaborative approach, the committee had now finalised proposals for the rightsizing of four Ministries.

Further, since the proposals embodied significant changes in the institutional design of the Federal Government, the Prime Minister had approved placement of the case before the Cabinet under rule 16(1) (m) of the Rules of Business, 1973 for consideration and approval. The proposals of the Committee were then placed before the cabinet.

The Cabinet was further informed that the Ministry of Industries and Production (whose proposals were finalised in Phase-1) made an additional presentation to the subcommittee of the committee on rightsizing as a special case owing to certain extraordinary circumstances.

The subcommittee revisited the entities like National Productivity Organization (NPO) and Pakistan Industrial Technical Assistance Centre (PITAC) Technology Upgradation & Skill Development Company (TUSDEC), Karachi Tools, Dies & Moulds Centre KTDMC National Fertiliser Corporation (NFC) and the National Fertiliser Marketing Limited (NFML). It was stated that the Committee had agreed to the viewpoint of the Minister for Industries and Production.

Accordingly, the following proposals were placed before the Cabinet for consideration: the cases of NPO, PITAC , TUSDEC and KTDMC may be reviewed again after one year, at which point they may be allowed to continue or be wound up subject to:

(i) achieving self-sufficiency via operating cash flows, including generating sufficient surplus to invest in replacement, repairs and maintenance of property, plant and equipment (PP&E);

(ii) excursively focusing on micro and small enterprises that could not otherwise afford comparable services;

(iii) precluding services to any entity beyond three years or below 75% of commercial prices; and

(iv) NFC and NFML may be included in the comprehensive review of securing fertilizer supply being carried out at the Trading Corporation of Pakistan (TCP).

In the ensuing discussion, the Cabinet Members, while appreciating the efforts of the Committee on Rightsizing of the Federal Government made the following observations:

(i) the Pakistan Standards and Quality Control Authority (PESQCA) needs to be further strengthened. Surplus employees resulting from the winding up should be efficiently reassigned, preferably within the same Ministry.

The function of quality standardisation is becoming increasingly important and therefore, requires clear ownership and reinforcement. The role of such authorities should be further enhanced;

(ii) the purpose of the rightsizing exercise is not only to reduce the financial burden but also to enhance efficiency.

As a matter of principle, the concerned Ministries should be consulted when finalizing the recommendations;

(iii) COMSATS, NUTECH and NUST should also be placed under the Ministry of National Education and Professional Training as was done in the case of the Virtual University;

(iv) Regulatory bodies need to enhance their performance and visibility.

Additionally, they should revise their fee structures to reduce reliance on government funding;

(v) PCSIR is not functioning effectively;

(vi) Trade Missions abroad tend to prioritize VIP visits rather than achieving their core objectives;

(vii) the Directorate General Trade Organisations (DGTO) is not fulfilling its responsibilities adequately;

(viii) Pakistan Council for Science and Technology (PCST) is performing well;

(ix) the recommendations regarding Pakistan Council for Renewable Energy Technologies (PCRET) need to be reviewed

(x) National Institute of Electronics (NIE) is performing well and should be retained and, if necessary, merged with PCSIR;

(xi) the Pakistan Halal Authority (PHA) has just begun its operations and deserves an opportunity to prove its effectiveness:

(xii) National Institute of Oceanography (NIO) should be retained and its performance improved;

(xiii) In the past the attached departments were not governed efficiently;

(xiv) precedent set in the case of PWD should be followed in cases where entities need to be wound up.

This approach should also be applied to the Department of Plant Protection(DPP); (xv) a timeline should be established for the outsourcing of Chamba House and other similar initiatives, with proper implementation timelines in place; (xvi) applied research and commercialization need greater emphasis; (xvii) Expo Centres and Trade Development Authority of Pakistan (TDAP) should be considered for privatisation, as the Export Development Fund and trade offices are performing similar functions; (xviii) Expo Centres are being used solely for exhibitions. Investors from Russia, Central Asia and other regional countries are also visiting various industrial areas located in distant cities.

Therefore, a state-of-the-art expo centre in Islamabad is urgently needed; (xix) Trade Missions are doing a commendable job, especially the mission in China. Local trade counsellors who are fluent in regional languages should be recruited, especially in Russia and other Central Asian states.

Following the detailed deliberations, the Cabinet directed the committee on the rightsizing of the Federal Government to further refine the proposals in the light of the observations made by the members of the cabinet during the meeting and to resubmit the case for consideration of the Cabinet at the earliest.

Copyright Business Recorder, 2025