close
Tuesday May 21, 2024

Profitable SOEs should also be considered for privatisation: cabinet committee

Federal footprint shall be limited only to "strategic and essential" SOEs, recommends CCOP

By Ashraf Malkham
May 11, 2024
Deputy PM and Foreign Minister Senator Ishaq Dar chairs the meeting of Cabinet Committee on Privatisation on May 10, 2024. — PID
Deputy PM and Foreign Minister Senator Ishaq Dar chairs the meeting of Cabinet Committee on Privatisation on May 10, 2024. — PID

ISLAMABAD: Taking the latest move to declare 24 state-owned enterprises (SOEs) fit for privatisation, the federal government has sought recommendations for the denationalisation of profitable entities as well, except for those institutions which came under the category of “strategic or essential”.

A set of decisions was taken in the Cabinet Committee on Privatisation (CCOP) which met under the chair of Deputy Prime Minister and Foreign Minister Ishaq Dar on Friday.

The meeting was also attended by other committee members including the finance minister, minister for commerce, minister for privatisation, minister for industries and production, governor State Bank of Pakistan (SBP), chairman Securities and Exchange Commission of Pakistan (SECP) besides federal secretaries of various ministries and division.

The Ministry of Privatisation presented a phased Privatisation Programme (2024-29), based on the recommendations of the Privatisation Commission (PC) board, for deliberations.

In a major step, the cabinet committee approved 24 state-owned entities for being included in the privatisation programme, a post-meeting declaration said, adding that directives were also issued to mull over the phasing of each entity in consultation with the respective ministries.

List of shortlisted SOEs

Geo News obtained a list of SOEs recommended for privatisation which include Pakistan International Airlines (PIA), First Women Bank Limited, House Building Finance Company Limited (HBFC), Zarai Taraqiati Bank Limited, Utility Stores Corporation (USC), Pakistan Engineering Company Limited (Peco), State Life Insurance Co Limited, Sindh Engineering Limited (Sel), and Pakistan Re-Insurance Co Limited.

Moreover, government-owned power distribution companies, including Lahore Electric Supply Company Limited (Lesco), Islamabad Electric Supply Company Limited (Iesco), Multan Electric Power Company Limited (Mepco), Gujranwala Electric Power Company Limited (Gepco), Hyderabad Electric Supply Company Limited (Hesco), Peshawar Electric Supply Company Limited (Pesco), Sukkur Electric Power Company (Sepco), and other enterprises were also included in the list.

Privatisation of 'profitable entities' on the cards

The CCOP recommended that priority shall be accorded to the privatisation of loss-making entities while the federal footprint shall be limited only to the “strategic and essential” SOEs under the federal government’s domain.

The committee emphasised that even the SOE making profits shall be considered for privatisation. After deliberating on the privatisation policy guidelines, the CCOP considered 84 SOEs in detail in light of the SOE Act and Policy.

Following the deliberations, the committee recommended that 40 SOEs, categorised as strategic or essential, be placed by respective ministries before the Cabinet Committee on State-Owned Enterprises (CCoSOE) for their categorisation.

Those SOEs which will not be categorised as strategic or essential shall be included in the Privatisation Programme, it added.

The CCOP directed the privatisation ministry to deliberate the rationale provided by respective ministries for not including 18 SOEs in consultation with them and firmed up proposals regarding each shall be submitted to the CCOP in its next meeting.

All ministries and divisions have been directed to take up their cases of SOEs’ categorisation with the CCOSOE at the earliest so that a comprehensive phased privatisation programme is finalised in the next meeting of CCOP.

The CCOP also considered the proposal for the “transfer of 322,460,900 shares of Oil & Gas Development Company (OGDCL) from the Privatisation Commission’s CDC’s account to Ministry of Energy (Petroleum Division).

The matter was deferred with the direction to the Law and Justice Division to holistically examine the provisions of the Sovereign Wealth Fund Act, 2023, in the instant case and submit its recommendations before the CCOP in its next meeting.

With additional input from APP.