Sarmaya-e-Pakistan Limited likely to meet dead end

Due to legal complications, easier alternatives are being explored

ISLAMABAD: Sarmaya-e-Pakistan Limited (SPL), the company set up by the Pakistan Tehreek-e-Insaf (PTI) government to turnaround loss-making firms, is likely to meet a dead end even before it becomes functional due to legal complications.

In order to revive loss-making public sector enterprises, the government had decided to frame an appropriate governance structure keeping in view the best international practices followed in Singapore and Malaysia.

The PTI government had set up SPL with a capital of Rs500 billion in a bid to take over management control and have better oversight of all public sector companies.

Under a proposed plan, the companies engaged in commercial operations were to be converted into companies having share capital and subsequently transferred to SPL.

Officials told The Express Tribune that Adviser to the Prime Minister on Institutional Reforms and Austerity Dr Ishrat Husain had highlighted that recommendation for placement of certain entities in Sarmaya Pakistan had been made in light of an earlier cabinet decision. However, he also sought clarity on whether the concept of Sarmaya Pakistan was still in place or not.

Adviser to the Prime Minister on Finance and Revenue Hafeez Sheikh had informed the prime minister and cabinet members that due to legal complications associated with the concept of Sarmaya Pakistan, easier alternatives were being explored. The picture would become clearer once a less complicated variant is finalized, Shaikh had added.

The cabinet members also expressed concern over the fate of employees affected by the winding up/mergers of various organisations. It was clarified that as per the earlier directions of the cabinet no employee would be laid off and instead would go into surplus pool for further adjustment in other organisations.

Earlier, the cabinet had constituted an implementation committee on the subject of reorganising of federal government headed by adviser to the prime minister on institutional reforms and austerity. The mandate of the committee is to work out an implementation strategy/work plan in consultation with the task force and submit the monthly progress report.

During the period from October 2019 to January, 2020, the committee held 13 meetings. The representatives of the ministries/divisions/departments were invited and the proposals were threadbare discussed.

The recommendations include those which have been made with the consensus of all the stakeholders. The proposals which were deliberated but could not be finalised and are still under discussions will be submitted before the cabinet after finalisation.

The committee recommended the bifurcation of entities into two categories ie organizations on active list of privatisation and organisations on privatisation/Sarmaya Pakistan. As many as 16 entities were recommended for placement in active list of privatization and 30 for placement in privatisation/Sarmaya Pakistan.

The Establishment Division solicited the approval of these and other recommendations of the implementation committee. The cabinet has approved the recommendations of the committee for implementation. 

Published in The Express Tribune, March 22^nd, 2020.

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