Govt mulls private managers, forensic audit of SOEs

ISLAMABAD: The government is examining the options of involving private managers through management contracts and forensic audit of loss-making state-owned entities (SOEs) as it prepares to submit a progress report to the International Monetary Fund (IMF) by Sept 30.

Presiding over a meeting of the Cabinet Committee on State-Owned Enterprises (CCSOEs), Adviser to the Prime Minister on Finance & Revenue Dr Abdul Hafeez Shaikh on Monday said that a new category of SOEs should be prepared over the next couple of days which could be handed over the private sector through management contract in a short time period without creating any problems for the line ministries as well.

The CCSOEs discussed in detail the proposed SOEs for retention, privatisation and for restructuring. The adviser directed that the list should be reviewed and revisited till the next meeting and a new category may be introduced in the list where ownership may be retained by the government and the entity can be operated by the private sector for better management.

The meeting was given a detailed briefing on the triage of SOEs. The triage was undertaken for three categories — liquidation, privatisation and retention under government ownership — on the basis of economic rationale and financial performance of the SOEs.

Dr Shaikh observed that while following these three categories, the government may not be able to achieve any measurable outcome over the next one year and hence a new category of SOEs needed to be created over the next few days so that the CCSOE is able to make some tangible progress.

The sources said that it was important to update the IMF about the progress on triage of SOEs but this should not be the only consideration. Instead the committee should consider strategies to make some valuable contribution towards improving the performance of the SOEs in the shortest possible time that may better be presentable to the IMF as well.

The meeting also discussed a draft SOEs law. The adviser directed that the law may be reviewed further in consultation with the line ministries and divisions including the Law Division.