ISLAMABAD: The State-Owned Enterprises (SOEs) Ownership and Management Policy envisages that the line ministries and divisions will develop a plan with respect to transforming non-strategic/ non-essential SOEs, in consultation with the respective boards and the Privatisation Commission through various options.
The SOEs Ownership and Management Policy 2023 uploaded by the Finance Division on its website said that for non-strategic/ non-essential SOEs, line ministries/ divisions will develop a plan, in consultation with the respective boards and the Privatisation Commission where required, to transform these SOEs through different options including but not limited to corporate restructuring, management contracts, joint ventures, public private partnerships, listing on Stock Exchange and outsourcing under applicable laws.
In case the SOE is facing financial or operational problems, the federal government shall require the line ministry to develop a transformational plan for financial and operational improvement of the SOEs in consultation with the Board, and if required with the Central Monitoring Unit (CMU).
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If the SOE is unable to perform satisfactorily financially and operationally after repeated efforts to improve performance, the Minister in Charge of the federal government shall declare it a sick company in terms of section 292 of the Companies Act, 2017 and any institution, authority, committee, or person may be authorised there under to draw up a plan for the rehabilitation, reconstruction, and reorganisation of such SOE.
Allow the Privatisation Commission to determine the next steps for these SOEs, and in this regard, the federal government, if it deems appropriate or necessary, may recommend measures to protect the strategic interest of the federal government during the transformation process.
The federal government shall: a) exercise all the powers and rights that shareholders have in relation to the SOE; b) the federal government shall ensure the establishment of a standing committee of the Federal Cabinet - Cabinet Committee on SOEs (CCoSOEs) - whose responsibility shall be to enforce and monitor the Act, this Policy and other ancillary matters; and c) the federal government shall ensure the establishment of a CMU in the Finance Division, whose primary responsibility shall be to perform functions as provided in Section 31 of the Act.
The federal government shall own or retain those SOEs that are strategic or essential, which are completely/ partially engaged in strategic functions.
The strategic functions refer to the outcomes which have significant strategic, security, or social importance in addition to economic values for the country. Essential SOEs: Essential SOEs refer to the SOEs which are critical for the execution of government policies and where the private sector is unable to assume those functions due to various reasons including;(i) large/intensive capitalisation; (ii) market stabilisation/ food security; (iii) sectoral/ market development; (iv) a natural monopoly/ oligopoly service provider and there is no effective regulatory oversight of their operations. However, in such cases, the federal government may explore transformation options such as outsourcing and management transfer options with sufficient safeguards embedded; (v) SOEs established or required to be established under any Law/Statute; (vi) Entities established through G2G or inter-governmental arrangements.
The federal government shall, at least once in every five years, prepare and prescribe a SOEs ownership and management policy for giving effect to the objectives of this Act. The CMU will establish a central electronic database of information on the financial and non-financial performance of every SOE. The Finance Division will ensure deputing/engaging the qualified and experienced professional management and staff in the CMU. The database developed by the CMU will generate bi-annual reports and shall submit the same for the consideration of CCoSOEs. The database will contain financial and non-financial performance information for each SOE.
Copyright Business Recorder, 2023