To be shared with IMF: MoF asks ministries to submit 17 SOEs’ makeover plans

ISLAMABAD: The Ministry of Finance has sought restructuring/business plans of 17 State Owned Entities (SOEs) from their administrative ministries to be shared with the International Monetary Fund (IMF), well-informed sources told media.

“Restructuring plans of SOES are the requirement under our commitment with the IMF and are also to be presented to the Cabinet Committee on State Owned Enterprises (CCoSOEs).

Accordingly, restructuring/transformation of SOEs be provided by October 25, 2024,” said Finance Ministry, in its communications with the concerned ministries.

15 largest SOEs: MoF seeks report to share plans with IMF

The SOE’s which are restructured/transformed or their business plans are to shared with the IMF for approval of CCoSOE are as follows; (i) Business Plan of Printing Corporation of Pakistan (Cabinet Division);(ii) restructuring plan of Pakistan Railways (Railways Division); (iii) restructuring plan of STEDEC( Ministry of Science and Technology); (iv) restructuring plan of Pakistan Television Corporation (PTVC) (Ministry of Information and Broadcasting); (v) restructuring plan of Pakistan Broadcasting Corporation (PBC)( Ministry of Information and Broadcasting); (vi) restructuring/business/merger plan of EPZA/PIDC, SMEDA( Ministry of Industries and Production); (vii) restructuring plan of Overseas Employment Corporation, Overseas Pakistanis Foun-dation , restructuring plan along with a third part study of PRIMACO( Ministry of Overseas Pakistanis and Human Resource Develop-ment); (viii) restructuring plan of erstwhile PEPCO and NESPAK (now under administrative control of Cabinet Division); (ix) restructuring/business plan of Pakistan Post Office Depar-tment (PPOD) (Ministry of Communication); (x) restructuring/business plan of National Highways Autho-rity (NHA) ( Ministry of Communication); (xi) restructuring/business plan of Heavy Mechanical Complex (HMC); and (xii) restructuring/business plan of Water and Power Development Authority (WAPDA) Ministry of Water Resources.

Pakistani authorities informed the Fund they have begun the process of coverage of all SOEs under the SOE governance framework, by completing, on June 22, 2024, the revisions, in consultation with IMF staff, to the laws of four selected statutory SOEs (the National Highway Authority, Pakistan Postal Services, National Shipping Corporation, and Pakistan Broadcasting Corporation), which were amended by Ordinances published on November 30, 2023. The revisions make the SOE Act fully applicable to those SOEs, such that they are fully aligned with key SOE corporate governance principles introduced in the new SOE Act.

Authorities further stated that they are committed to continue amending SOE dedicated laws for the remaining 12 statutory SOEs, to similarly fully align them with the provisions of the SOE Act and complete the process for at least 10 entities excluding any entities that as of end-July 2024 were listed in the privatisation program and for which a specific financial adviser has been approved by the Board of the Privatisation Commission and hired through a signed contract (structural benchmark end-June 2025). The amendments to the remaining two SOEs will be enacted by end September 2025.

According to IMF Staff Report released last week, the Fund said that many SOEs provide poor-quality services and make large losses, absorbing 8¾ percent of GDP in direct budget support (cumulative since 2016).

Capitalizing on progress made on SOE governance in recent years—notably, the adoption of the SOE Act and SOE Policy and establishment of the Central Monitoring Unit (CMU) in 2023 and the June 2024 completion of amendments to the laws of four selected statutory SOEs to bring them in line with the SOE Act (previously a missed SB under the 2023-24 SBA)—must continue as it is critical to reforming the sector. Policies will focus on ensuring the new SOE legal framework covers the entire SOE portfolio by, in consultation with IMF staff, (i) amending the laws of the remaining 12 statutory SOEs to achieve the same objective (end June 2025 SB for another 10 SOEs); and (ii) amending the 2023 Sovereign Wealth Fund (SWF) Act (end-December 2024 SB) to ensure that SOEs under the ownership of the SWF revert to the SOE Act’s governance structures; and to ensure that the SWF itself comes under governance mechanisms and safeguards in line with its principal nature as a holding company.