ISLAMABAD: Caretaker Finance Minister Dr Shamshad Akhtar on Thursday said external interference, lack of accountability as well as weak management and limited accountability have been the factors for state-owned enterprises’ losses of Rs500 billion.
Addressing a news conference, the caretaker finance minister said that the government has prepared a policy structure and design with regard to the SOEs, in this regard and now it is being finalised in consultation and support of all the relevant ministries and partners.
The process of privatisation of some institutions will continue, added the caretaker minister.
She said that the government had established a range of PSEs which played a role in economic development and provided essential public service, however, some of these SOEs were marked with inefficiencies and their loss was about Rs500 billion as per 2020 data.
MoF prepares draft policy on SOEs
Akhtar added that these companies suffered losses, of course, due to lack of autonomy external interference, weak management limited accountability inappropriate boards owing to the absence of fit-and-proper criterion in their composition led to their losses, as well as a decline in service delivery and a massive drain on public resources.
She added that the Ministry of Finance is the ultimate owner and these assets and the rescue of these companies when these are in trouble, therefore, it was important to bring them in the hub.
She said that the SOEs are spread over energy, transportation, telecommunication as well as in the financial and banking sectors and overtime, the overall performance of these entities has decreased and was below the expectation.
The minister added that hopefully, the Finance Ministry’s unit would come up with updated figures in the next few months.
She said that strategic and non-strategic would be developed by the Finance Ministry in consultation with the relevant ministries and once it is done it would go to the cabinet. Shamshad Akhtar said that the highlights of SOEs Act, 2023, are nomination of independent directors, the office of the CEO has to be separated and granted exemption in terms of the PPRA rules, whereas, the appointment of the CEO would be critical.
The minister added that the Central Monitoring Unit (CMU) will maintain the electronic database and would conduct an analysis of the financial commercial operation of the SOEs which would be shared with the cabinet.
The minister added that the government would continue with the good action taken by the previous government.
Shamshad Akhtar said that the federal government would establish strategic SOEs and non-strategic SOEs would be phased out.
The minister added that no direction would be given to the SOEs and management of SOEs by the ministries.
Akhtar said that the previous government has been issuing annual report but now the data has been given of 2020 and when the latest data would be available as major loss-making entities are in the power sector. The burden of the losses and the burden of guarantees. She said that state guarantees are realities but are restricted within the IMF limit.
According to data shared by the finance minister after the press conference with regard to the top 10 loss and profit-making entities, the top 10 loss-making government enterprises included; (i) Quetta Electric Supply Company with over Rs108 billion losses in the year 2020; (ii) National Highways Authority with a loss of Rs94.3 billion; (iii) Pakistan Railways with a loss of Rs50.2 billion; (iv) Sukkur Electric Power Company Rs40.8 billion; (v) PIA’s Rs36.07billion; (vi) Sui Southern Gas Pipeline’s loss Rs21.4 billion; (vii) Pakistan Steel Mills Rs20.6 billion; (viii) HESCO’s Rs17.7 billion; (ix) Pakistan State Oil Company Rs14.8 billion, and Peshawar Electric Supply Company Rs14.6 billion.
According to the documents, among the top profitable government enterprises in 2020 are: (i) the Oil and Gas Development Company with Rs100.8 billion;(ii) Pakistan Petroleum Limited Rs49.4 billion; (iii) National Bank Of Pakistan Rs30.6 billion; (iv) Government Holding Private Limited Rs29.8 billion; (v) National Power Parks Management Rs280 million; (vi) Port Qasim Authority’s profit Rs15.4 billion; (vii) National Transmission and Dispatch (NTDC) Rs9.3 billion; (viii) Pak-Kuwait Investment Company Rs6.3 billion; (ix) Faisalabad Electric Supply Company Rs6.08 billion and the profit of Pakistan Agricultural Storage and Services Corporation Limited stood at Rs6.02 billion.
Copyright Business Recorder, 2023