ISLAMABAD: The government has decided to replace Pakistan Agricultural Storage and Services Corporation Limited (Passco) with Wheat Stocks Management Company (WSMC) Public Ltd with authorized capital of Rs350 billion, official sources told Business Recorder.
Passco, a Public Limited Company incorporated under the Companies Ordinance, 1984 (now WSMC Companies Act, 2017), was established with the mandate of procuring wheat for maintaining national wheat reserves. In the backdrop of the redefined role of the federal government in the wheat operations, the Prime Minister’s Office (PMO), through directives of September 12, 2024 and March 21, 2025, instructed the winding up of PASSCO after stakeholder consultations, and advised the development of an alternative mechanism for maintaining strategic wheat reserves.
Thereafter, the Prime Minister’s Office, vide its directive of August 25, 2025, assigned the Finance Minister to lead the process of PASSCO’s winding up in consultation with the Ministry of National Food Security & Research (MNFSR).
Govt offered to procure 0.8m tons of wheat from Passco to help stabilise prices
In this regard, the committee headed by the Finance Minister has since held five meetings (on 2nd, 5th, 11th, 19th September, and 10th October 2025) to deliberate on the modalities of disposal of wheat stock, settling of Passco liabilities, and the eventual winding-up of Passco.
Among other matters, the settlement of Passco’s receivables from the recipient agencies, including receivables from Federal and Provincial Governments, and its liabilities towards creditors amounting to Rs. 527.664 billion, was extensively discussed. It is projected that after adjustment through sale proceeds of wheat stock, realization of dues from recipient agencies, and disposal of assets, a residual liability of approximately Rs. 121 billion will remain to be settled for closing the balance sheet prior to winding up.
On November 18, 2025, the ECC was informed that as this residual amount cannot be immediately met through budgetary resources, it has been decided that a Special Purpose Vehicle (SPV), a company under Section 32 shall be incorporated to raise long-term financing from banks, under the Government of Pakistan’s sovereign guarantee. The proceeds will be used for the settlement of Passco’s liabilities to various creditor Banks.
The Federal Government will service the SPV’s debt obligations through annual budgetary allocations over a period of 5 to 7 years, in line with the amortization schedule to be agreed with the lenders.
In view of the foregoing, the ECC of the Cabinet was requested to consider and approve the following proposals: (i) establishment of a Special Purpose Vehicle (SPV), titled Wheat Stocks Management Company (WSMC) Public Ltd. under the Companies Act, 2017, with an initial paid-up capital of Rs. 1,000,000 and an authorized capital of Rs 350 billion.
The objective of the WSMC Public Ltd. shall be to raise long-term financing from banks, under the Government of Pakistan guarantee, with the stipulation that the funds raised by the WSMC Public Ltd. shall be utilized to settle PASSCO’s left-over liabilities; (ii) authorization for MNFSR to prepare and submit the draft incorporation documents of the proposed SPV, including its Memorandum and Articles of Association, for vetting by the Law & Justice Division; (iii) approval for issuance of a notification in the Official Gazette, in terms of the Seventh Schedule to the Companies Act, 2017, to prescribe an incorporation fee of Rs. 10,000 for the proposed SPV, being a wholly owned government company, irrespective of the amount of its authorized share capital; (iv) approval for meeting incorporation-related expenditures of the SPV, including name, reservation fee, filing fee, and other statutory charges, and for paid-up capital from budgetary allocations through re- appropriation from within the Demand of MNFSR; (v) approval for exemption of WSMC Public Ltd. from the applicability of provisions of the State-Owned Enterprises (Governance and Operations) Act, 2023, in terms of section 3(1)(c) of the State-Owned Enterprises (Governance and Operations) Act, 2023 read with Clause 5 of the State- Owned Enterprises (Ownership and Management) Policy 2023, being a special purpose vehicle with no commercial operations;(vi) upon fulfillment of its mandate, the SPV shall be dissolved through self- liquidation in accordance with Section 347 of the Companies Act, 2017; (vii) Nomination of Secretary MNFSR, Secretary Finance Division, and Additional Secretary-I MNFSR, as the initial subscribers to the Memorandum of Association of WSMC Public Ltd; and (viii) approval for the appointment of Joint Secretary, MNFSR, as CEO of the Company till a regular CEO is appointed by the Board.
The sources said, the ECC has approved the proposal of Ministry of National Food Security and Research in its meeting on November 18, 2025. As the decision is ratified by the federal cabinet, winding up process of PASSCO will be initiated.
Copyright Business Recorder, 2025
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