Interim set-up told to step up SOEs’ privatisation

The International Monetary Fund (IMF) has asked the caretaker government to implement the terms of the $3 billion standby arrangement, including reducing costs and speeding up the process of privatisation of public entities.

The Washington-based lender has also demanded that 203 government companies should be removed from the ministries and placed under the finance ministry as per the pact.

In July this year, Pakistan secured a badly-needed $3 billion short-term financial package from the IMF, giving the economy a much-awaited respite as it teetered on the brink of default.

According to finance ministry sources, the IMF’s stance was that the management of these government companies by line ministries was an obstacle to improvement.

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They added that the global lender believed that generation and distribution companies in the power sector had increased losses because of poor governance.

The IMF was also of the view that the petroleum sector’s profitable oil and gas companies were facing huge losses.

The finance ministry also said that the IMF wanted the privatisation of the Pakistan International Airlines (PIA), Pakistan Steel Mills (PSM), regasified liquefied natural gas (RLNG) power plants and state-owned electricity distribution companies this financial year.

On Wednesday, caretaker Finance Minister Dr Shamshad Akhtar chaired a meeting of the Cabinet Committee on Privatisation.

The huddle decided to form a technical committee to remove the obstacles hindering the privatisation and restructuring of the PIA.

The cabinet committee directed the aviation ministry to work with the Privatisation Commission (PC) to present a detailed action plan for the PIA with a clear time framework in a sequenced manner.

The participants of the meeting were informed that committee had been formed to present a workable plan to involve the private sector in the management of the state-owned electricity distribution companies.

The PC secretary briefed the participants of the huddle about the issues related to the privatisation of loss-making state-owned enterprises (SOEs) including Heavy Electrical Complex, Services International Hotel, PSM, House Building Finance Company Limited (HBFC), Roosevelt Hotel in New York, PIA, RLNG power plants and electricity distribution companies.

The minister stressed the need for accelerating the privatisation of loss-making SOEs to foster great efficiency, productivity and to increase the overall revenues.