ISLAMABAD, May 6: The officials of the Ministry of Finance will discuss in detail the dismal performance of public sector corporations, which are incurring Rs100 billion losses annually, with the visiting IMF review mission here on Tuesday.
A full day has been reserved for discussion of state sector with a view to working out new measures to be incorporated in the budget for 2002-2003. A senior director of IMF Klaus Enders was heading the review mission, which arrived on Friday last and will stay in the capital for two weeks in connection with pre-budget consultations.
The Country Director of the World Bank in Islamabad John Wall has on record said during the recently concluded Pakistan Development Forum (PDF) at Paris that the government should pay attention to huge losses of the public sector entities. In this behalf he had particularly mentioned the Central Board of Revenue (CBR), Water and Development Authority (Wapda) and the Karachi Electric Supply Corporation (KESC) being the most corrupt state organizations in Pakistan.
The officials concerned said that steps were under way to reduce the losses of the public sector enterprises. They said the setting up of Corporate and Industrial Restructuring Corporation (CIRC) was one of the steps, which was aimed at either reviving or liquidating the loss-making units.
The World Bank, the IMF and the ADB had been calling for introducing reforms in the state sector entities so that their losses could be reduced.
“A few of the enterprises, in need of reform, like Wapda and Pakistan Steel, appear to be curiously exempt from action,” says latest country report of the World Bank “Pakistan Development Policy Review - A New Dawn.”
According to the report of “Debt Reduction and Management Strategy” headed by Dr. Parvez Hasan, public corporations like Trading Corporation of Pakistan (TCP), Ghee Corporation of Pakistan (GCP), Cotton Export Corporation (CEC), Rice Export Corporation of Pakistan (RECP), Saindak etc. had been incurring substantial losses and huge operating deficits. To cover their losses the government guaranteed bonds were issued, which assigned to the government the responsibility of repaying either (only interest payments) or the entire amount (interest and principal payments) owed on account of these bonds if the corporations could not service these bonds themselves. “ But from the very outset, these corporations could not service these bonds themselves and the government had to take over the entire liability,” the report said.