Pakistan drafts policy for state entities before possible privatisation

KARACHI, (Reuters): Pakistan’s caretaker government has drafted a preliminary policy for State Owned Entities (SOEs), and listed ten companies for privatisation initiatives or turnaround, said Caretaker Finance Minister Shamshad Akhtar during a press conference on Thursday.

Under the current $3 billion bailout package from the International Monetary Fund (IMD), that was critical in averting a sovereign debt default, losses in SOEs, which are burning a hole in government finances, will need stronger governance.

As of 2020, the accumulated losses for SOEs mounted to 500 billion rupees ($1.74 billion), said Akhtar.

She said under the policy, the appointment of independent directors will be through a nomination process, adding that no ministry would be able to issue directives to SOEs in order to improve governance.

Pakistan has been discussing outsourcing operations of several of its state owned assets to outside companies.

In March, it kicked off outsourcing of operations and land assets at three major airports to be run under a public private partnership, a move to generate foreign exchange reserves for its ailing economy.

The government has budgeted only about 15 billion Pakistani rupees ($52.42 million) in receipts from a stalled privatisation process in its budget for the fiscal year 2024.