Adviser to the Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh chaired the meeting of the Cabinet Committee on the State-owned Enterprises (CCoSOEs) held here on Wednesday to discuss the governance reforms on the state-owned enterprises and the reconstitution of the Board of Directors of Sarmaya-i-Pakistan Limited.
The CCoSOEs meeting decided to set up a sub-committee headed by Minister for Industries and Production Muhammad Hammad Azhar to study the status and implementation of the recommendations of Task Force on Austerity and Government Restructuring Report on restructuring and reorganization of the federal government.
Earlier, the CCoSOEs was informed by the Ministry of Finance that around 85 commercial SOEs were working under the administrative control of 19 federal ministries/divisions but the overall performance of the SOEs had remained unsatisfactory despite considerable financial support provided by the federal government from time to time.
The meeting was further informed that during FY2017-18 an amount of Rs 143 billion was provided to various SOEs as subsidies, Rs 204 billion as cash development loan, Rs 27 billion as equity injection and GoP guarantees amounting to Rs 318 billion were issued. Despite such a large support, the SOEs sector as a whole registered net losses of Rs 265 billion.
The Ministry of Finance in its presentation attributed the poor performance of the SOEs to various factors, particularly redundancies and duplications, a completely decentralized governance framework with lack of inter-agency coordination, excessive interference and over-regulation by multiple government agencies and lack of technical expertise and specialized skills in the line ministries for the management of commercial COEs.
The Ministry of Finance also briefed the CCoSOEs on various steps taken for reforms and improvement in the SOEs governance framework, including Sarmaya-i-Pakistan and structural benchmarks agreed with the international financial institutions. It further updated the members of the Committee of legal framework being developed for the liquidation, privatization and retention under the government ownership on the basis of economic rationale and financial performance of SOEs.
Advisor to the Prime Minister on Institutional Reforms and Austerity Dr. Ishrat Hussain briefed the meeting on the gist of proposals of the Task Force on Austerity and Government Restructuring Report on restructuring and reorganization of the federal government.