THE annual report of the Finance Ministry on State-Owned Enterprises (SOEs) confirms once again that losses being incurred by public sector entities can be reduced and they can be turned into profitable ventures through right policies, reforms and innovative ideas.
The report says the overall losses were the highest in FY2018, amounting to Rs286 billion, which were curtailed to Rs143 billion in FY2019.
This improvement in the financial performance of SOEs was mainly due to the reduction of losses in the power sector of selected SOEs during FY2018-19.
The Government really deserves credit for this achievement, which is indicative of the fact that the hard work done and bitter decisions taken have started yielding positive results.
The report pertains to 2018 and 2019 and the situation might have improved further as major decisions about institutional reforms were taken during 2020 and their full impact would be felt during the current year.
It is heartening to note that OGDCL earned the profit of Rs118.3 billion, PPL Rs59.4 billion, and Government Holding Power Company Rs34.1 billion in the fiscal year 2019.
Power sector dominates the list of loss-making enterprises with QESCO suffering losses of Rs36.8 billion, LESCO Rs36.6 billion, PESCO Rs29.2 billion, MEPCO Rs22.7 billion, and SEPCO Rs10.9 billion.
The losses would surely come down due to aggressive strategy being pursued by the Government to check theft as well as corruption besides heavy investment on improvement of infrastructure, which would lead to reduction in line losses.
Some institutions were stuffed with political appointments in the past and the burden of manpower along with corruption and bad management played havoc with them but the politically unpopular policy adopted by the incumbent Government to lay off superfluous staff would surely help improve their working and performance provided they are allowed to run on commercial lines.
Some of the entities are slated for privatization and their successful divestment could reduce the overall losses of the public sector institutions.
However, we would urge the Government to review the policy of privatization with focus on improving efficiency through innovative ideas.