Cabinet refuses to ratify SOE board

Sees no need to appoint directors of closed Pakistan Steel Mills subsidiary

ISLAMABAD:

The cabinet has refused to approve the appointment of board of directors of Pakistan Steel Fabricating Company Limited, a subsidiary of Pakistan Steel Mills (PSM), and is mulling over winding up the firm in due course.

Sources told The Express Tribune that the Ministry of Industries and Production placed decisions of the Cabinet Committee on State-owned Enterprises (CCoSOEs) before the cabinet for ratification.

The first decision was the constitution of the board of directors of Pakistan Steel Fabricating Company. During discussions, it was observed that since PSM was already closed, the formation of the board of steel fabricating company, a subsidiary of PSM, appeared to be unnecessary.

The Industries and Production Division explained that the board of steel fabricating firm was being constituted to take a decision on winding up the company. It was clarified that both PSM and the steel fabricating company would be liquidated in due course.

The cabinet emphasised that the matter should be presented again to the CCoSOEs after examining the possible options to wind up the steel fabricating company, and other similar organisations, without constituting the board of directors, which would help avoid wastage of time and extra expenses.

The CCoSOEs had considered another matter pertaining to the declaration of National Disaster Risk Management Fund (NDRMF) as a strategic state-owned unit, as defined under the SOE Policy, 2023.

The cabinet was of the view that the mandate of NDRMF was similar to that of the National Disaster Management Authority (NDMA); therefore it may be more appropriate to transfer control of the NDRMF to the NDMA instead of categorising it as an essential state enterprise.

During the meeting, the Planning, Development and Special Initiatives Division explained that the mandate of NDRMF was different from that of NDMA.

The former was focused on infrastructure projects to enhance Pakistan's resilience in response to natural disasters, while the latter was concerned with undertaking immediate relief operations, it said.

Moreover, the NDRMF provided a common window to pool various contributions from a diverse base of bilateral and multilateral development partners.

The government of Pakistan has received funds from the international development partners including the Asian Development Bank, the World Bank and other bilateral partners for the NDRMF to undertake the assigned functions and a subsidiary grant agreement has been signed to this effect.

The cabinet, however, stressed that it was necessary to examine the options for merging the NDRMF with the NDMA without compromising the functions being performed by the fund. It gave the directive that the case should be placed before the Committee on Rightsizing for its consideration.

The cabinet did not ratify the decision on constituting the board of directors of Pakistan Steel Fabricating Company. It told the Industries and Production Division to place the matter again before the CCoSOEs after examining the possible options for winding up the company without appointing the board.