ISLAMABAD: The government is considering abolishing the basic pay scales (BPS), starting with non-gazetted staff in the public sector, and replacing them with a contract-based workforce as part of public-sector reforms to scale down the long-term cash load on the budget.

Another one of the proposed reforms calls for converting all federal public sector medical facilities into semi-commercial hubs for medical tourism on the public-private partnership (PPP) basis, to generate funds for the government’s socio-economic objectives, rather than being a drain on the federal budget.

Informed sources told Dawn that the Ministry of Finance had discussed these initiatives with the multilateral lending agencies, including the World Bank, and may seek their technical and financial support for their implementation.

The government has already notified pension reforms, replacing the current pension system with contributory pension schemes for all future inductions, both in the civil as well as armed forces. This aims to restrict a rise in the pension bill which crossed Rs1.015 trillion — including Rs665bn in military pensions and over Rs220bn in civil pensions — in the current year’s budget.

Sources said that while the rights of the existing officers inducted through Central Superior Service (CSS) and Provincial Service Commission (PSCs) exams would remain protected, the majority of the fresh inductions would be on lump-sum salaries without associated long-term fringe benefits like medical protection, except through insurance.

Such hiring would be subject to removal or exit on a three-to-six-month notice, based on key performance indicators and thus help reduce long-term cash load on the public purse, given the fact that BPS system had budgetary reflections from many aspects including pensions, medical coverage, allowances and so on.

This is initially estimated to provide Rs35bn-Rs40bn annual savings provided all institutions and corporations, other than federal ministries, shift to the special package from the ballooning effect of BPS system.

Public-sector hospitals

Moreover, sources said that federal government-run hospitals such as the Pakistan Institute of Medical Sciences (Pims), Federal Government Employees Hospital or Polyclinic, Capital Development Authority (CDA) Hospital, Sheikh Zayed Hospital in Lahore and Jinnah Post-Graduate Medical Complex Hospital in Karachi as well as a number of dispensaries would be outsourced, on extendable term contracts or public-private partnership.

The outsourcing of CDA Hospital is already in process, according to sources.

About Rs10bn are spent on these hospitals which could instead generate funds to provide health facilities to the poor, they said.

For example, an official said Pims alone needs about Rs3bn per annum for maintenance even though its vast land had the capacity to have high-rise buildings that can generate resources and attract medical tourism with improved medical health facilities through assistance of institutions such as Aga Khan Foundation.

With quality assurance, smooth implementation and external assistance, only Islamabad-based health facilities are estimated to have potential to create Rs80bn-Rs100bn in less than five years, an official estimated.

Published in Dawn, November 11th, 2024