ISLAMABAD: Cabinet Committee on the State-owned Enterprises (CCoSOEs) Wednesday discussed the governance reforms on the state-owned enterprises (SOEs) and reconstitution of the board of directors of Sarmaya-i-Pakistan Limited.

The CCoSOEs meeting was chaired by Adviser to the Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh, said a finance ministry press statement.

The committee decided to set up a sub-committee headed by Minister for Industries and Production Muhammad Hammad Azhar to study the status and implementation of the recommendations of Task Force on Austerity and Government Restructuring Report on restructuring and reorganisation of the federal government.

Earlier, the CCoSOEs was informed by the Ministry of Finance that around 85 commercial SOEs were working under the administrative control of 19 federal ministries/divisions but the overall performance of the SOEs had remained unsatisfactory despite considerable financial support provided by the federal government from time to time.

The meeting was further informed that during fiscal year 2017-18 an amount of Rs143 billion was provided to various SOEs as subsidies, Rs204 billion as cash development loan, Rs27 billion as equity injection and government of Pakistan guarantees amounting to Rs318 billion were issued. Despite such a large support, the SOEs sector as a whole registered net losses of Rs265 billion.

The Ministry of Finance in its presentation attributed the poor performance of the SOEs to various factors, particularly redundancies and duplications, a completely decentralised governance framework with lack of inter-agency coordination, excessive interference and over-regulation by multiple government agencies and lack of technical expertises and specialised skills in the line ministries for the management of commercial COEs.

The Ministry of Finance also briefed the CCoSOEs on various steps taken for reforms and improvement in the SOEs governance framework, including Sarmaya-i-Pakistan and structural benchmarks agreed with the international financial institutions.

It further updated the members of the committee of legal framework being developed for the liquidation, privatisation and retention under the government ownership on the basis of economic rationale and financial performance of SOEs.

Advisor to the Prime Minister on Institutional Reforms and Austerity Dr Ishrat Hussain briefed the meeting on the gist of proposals of the Task Force on Austerity and Government Restructuring Report on restructuring and reorganisation of the federal government.

He opined that the Task Force’s proposals which had already been approved by the federal cabinet and were being implemented at different levels by the federal government could be a starting point for the CCoSOEs to see and decide which SOEs were to be privatised, which to be liquidated, wound up or closed down and which were to be reorganised and retained by the government or merged with other entities.

The meeting appreciated the work done by Dr Ishrat Hussain and his team and decided to constitute a team led by Minister for Industries and Production Muhammad Hammad Azhar to study the status and implementation of the recommendations of Task Force on Austerity and Government Restructuring Report on restructuring and reorganisation of the federal government and report to the CCoSOEs in its next meeting to be held soon.

The committee headed by Muhammad Hammad Azhar would include representation from the Finance Division, Privatisation Commission and the office of the Advisor to the Prime Minister on Institutional Reforms and Austerity.