Govt initiates process to close over 30 state-owned entities

ISLAMABAD: The federal government has initiated the closure of 33 State-Owned Enterprises (SOEs), the abolishment of 60 per cent of vacant regulatory posts (up to 150,000), and the outsourcing of non-core services as part of a major restructuring plan.

According to Business Recorder, in the first phase, six ministries will undergo rightsizing, a process aimed at reducing the size and cost of the federal government.

This restructuring was driven by the “Committee on Rightsizing of the Federal Government,” established by Prime Minister Shehbaz Sharif in June 2024.

The committee’s main tasks include identifying functions that can be shifted to the private sector, determining roles that belong to provincial jurisdictions, and developing a plan for managing human resources and assets.

The first phase focuses on six ministries: Capital Administration and Development, Industries and Production, IT and Telecom, Kashmir Affairs and Gilgit-Baltistan, National Health Services, and States and Frontier Regions.

Extensive consultations with key stakeholders were conducted to assess the financial, institutional, and workforce impact of the proposed changes. The World Bank also provided expert input.

Recommendations for this phase include eliminating 60 per cent of vacant posts, outsourcing non-essential services like cleaning and plumbing, and establishing a committee to handle grievances from employees affected by the restructuring.

The committee also suggested amendments to the Civil Servants Act and the creation of a Civil Service Reforms Committee to support the process.

On August 16, 2024, the Prime Minister approved these recommendations, with final instructions issued on August 19.

The plan also includes merging or transferring nine entities and closing 33 others. In the second phase, more ministries, including Commerce, Science and Technology, and National Food Security, will undergo similar reviews.

The federal government aims to complete the first phase of this restructuring within two weeks.

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