Ordinance promulgated to pave way for dissolution of SOEs’ boards

ISLAMABAD: President Asif Ali Zardari promulgated the State-owned Enterprises (Governance and Operations) (Amendment) Ordinance, 2024, paving the way for the dissolution of the boards of power, petroleum, and other state-run companies, a top official in the federal bureaucracy confirmed Thursday.

The official, speaking on condition of anonymity because he was not authorised to speak to the media, noted that these boards were primarily formed during the last coalition government, mostly two to three years ago on a political basis. The current government aims to reconstitute these boards.

The ordinance particularly targets power companies, including distribution companies but also extends to petroleum companies such as the Oil and Gas Development Company Limited (OGDCL), Pakistan Petroleum Limited (PPL) and Government Holdings Private Limited (GHPL) among others. Additionally, it covers dozens of other state-owned enterprises (SOEs) across various sectors, granting the government the power to dissolve their boards.

With the amendment, legal barriers that previously hindered the dissolution of boards of state-owned power companies have been removed. The complexities surrounding the removal of board members of SOEs have also been eliminated.

Following presidential approval, the Ministry of Law and Justice has promulgated the ordinance with immediate effect. The federal government now has the authority to remove board members based on recommendations from the Board Nomination Committee. This committee will evaluate the performance of directors of SOEs based on objectives and principles outlined in the ordinance. The ordinance specifies that performance evaluations will form the basis for recommendations for the removal of board members.

Notably, the federal cabinet had approved the issuance of the ordinance through a summary circulated for approval. Now, this new ordinance is in effect at once.