ISLAMABAD: A sub-committee of the Economic Advisory Council (EAC) on state-owned entities (SOEs) on Friday called for expediting the process of privatisation and empowering their board of directors at the earliest to improve their management structures.

Federal Minister for Finance and Revenue Shaukat Tarin presided over the meeting of the sub-committee of EAC on SOEs and privatisation. Minister for Privatisation Mohammedmian Soomro, Adviser to the Prime Minister on Institutional Reforms and Austerity Dr Ishrat Hussain and private members Arif Habib and Sultan Ali Allana attended the meeting.

The sub-committee reviewed the portfolio of SOEs for privatisation on the basis of strategic importance, performance, efficiency and profitability to suggest a way forward. The members deliberated over the Triage Policy of the government and discussed the cross-cutting issues related to financial and human resource management in this regard.

Mr Soomro and Dr Hussain updated the sub-committee about progress made with reference to the privatisation of SOEs to date and explained various legal and administrative challenges in the way of privatisation process related to different entities.

Mr Tarin wanted accelerating the pace of privatisation for bringing efficiency and competitiveness in operations of SOEs and desired to empower and strengthen the Board of Directors of the respective SOEs so that they can take firm decisions to improve management of these entities.

This proactive approach would ensure that unnecessary delays in privatisation due to multiple stakeholders are prevented.

The meeting decided to adopt a consultative and collaborative approach to complete the whole privatisation exercise with due diligence and fairness.

Mr Tarin and the EAC’s sub-committee was informed that the government had already finalised a triage of 85 out of a total of 212 public sector companies for their ultimate privatisation, liquidation or retention in the public sector as part of the IMF programme.

The overall revenues of all these 85 SOEs in 2018-19 amounted to about Rs4 trillion while the book value of their assets stood at Rs19tr. The revenues in 2018-19 were roughly 10 per cent of nominal GDP, provided employment to more than 450,000 people (0.8pc of the total workforce).

A total of 25 SOEs which together earned a cumulative profitability of Rs107bn in 2018-19 would be retained by the government of Pakistan.

Another 14 companies are also retained in the public sector and would be restructured while 10 other companies were already under the privatisation programme and yet another 24 companies would be privatised in the next phase between 2023 and 2024. There are about 10 other companies which have been described as potential candidates for privatisation while one entity — Industrial Development Bank Limited — is currently under liquidation.

The finance ministry reported that four companies having total profitability of Rs51.4bn were financially viable and would be retained in the government hands. These include Government Holding Private Limited (Rs34bn profit), Pak Arab Refinery Limited (Rs12.3bn), Pak-Kuwait Investment Company (Rs4.7bn) and Pakistan Revenue Automation Limited (Rs146 million).

Published in Dawn, May 1st, 2021