Wednesday October 04, 2023

Failure to take timely decisions: Reconstitution of SOEs boards in oil, gas sector on the cards

August 11, 2022

ISLAMABAD: The coalition government has decided to revamp within August the board of directors (BoDs) of all oil and gas sector companies as the present boards of state-owned enterprises (SOEs) are not capable of taking hard decisions, a senior official of the Energy Ministry told The News.

The present boards of Sui Southern Gas Company (SSGC), Sui Northern Gas Company (SNGPL), Pakistan LNG Limited (PLL), Pakistan Petroleum Limited (PLL), and Government Holding Private Company Limited (GHPL) are being revamped. The government will include in the board officials and bankers who are well versed with the corporate culture and have a sense of importance of timely decisions on making the companies turn around and more profitable.

“We have completed the performance review of the entities boards and found them not up to the mark, which is why the government has decided to reconstitute the boards. The government may also change the management of some of the entities. The official said that Pakistan LNG Limited is a 100 per cent state-owned company that failed to deliver to the country during the previous PTI regime. The top management of Pakistan LNG Limited (PLL) did not ink the LNG agreement when it was available at $4 per MMBTU after the first Covid-19 wave hit the world. And more importantly, the PLL management didn’t initiate the process six months ago to ink a term agreement with any LNG trading company knowing the fact the five-year contract with Gunvor will end in July 2022. The PLL neither allowed the private sector to import LNG under third-party access rules nor itself procured the LNG from the international spot market as per the country’s needs.”

In the power sector, the government has already reconstituted the boards of electricity distribution companies, which include GEPCO, LESCO, MEPCO, and FESCO. The reconstitution of Discos’ Boards have already been done after their evaluation in the light of performance contracts and recommendations of the Senate Standing Committee on Power, which was continuously urging the Power Division to remove members of the board, who had remained associated with the KE alongside its former MD Tabish Gauhar.

The Ministry of Energy (Power Division) is the administrative line ministry for 10 distribution companies (Discos). Their affairs are governed under the provisions of the Companies Act 2017 and the Public Sector Companies (Corporate Governance) Rules, 2013 through a Board of Directors nominated by the Government of Pakistan, as per provision of Section 165 of the Companies Act, 2017. Now the Power Division is revamping the boards of other SOEs such as NTDC (National Transmission Despatch Company) and then remaining DISCOs that include IESCO, PESCO, HESCO, SEPCO and QUESCO.