Govt to fast-track privatisation, more SOEs to be handed to PC: Aurangzeb

Finance Minister Muhammad Aurangzeb on Monday said that the government remains committed to accelerating the privatisation process, saying that more State-Owned Enterprises (SOEs) will be gradually privatised.

“It is the prime minister’s clear directive that the privatisation process should move forward with transparency and speed. Following the momentum generated by PIA’s privatisation, we now have strong tailwinds.

“We will not stop at 26 SOEs; additional SOEs will gradually be handed over to the Privatisation Commission,” he said.

The minister was presenting details of the performance, financial condition, governance reforms and structural changes of SOEs.

He said several institutions have already shut down or are in the process of closing. “These closures have been carried out transparently. The main issue with these entities was that they were receiving billions of rupees in subsidies, and there were problems of theft, leakage, and corruption,” he said.

The finance minister said there are a few more entities in this category, and further decisions will be made on the overall rightsizing of the federal government.

“The privatisation of PIA was conducted transparently, and control will be transferred to private sector sponsors in April,” he said.

“The privatisation process of ZTBL (Zarai Taraqiati Bank Ltd) is at an advanced stage, and it will soon be presented to the Cabinet Committee on Privatisation. Similarly, HBFC is also being actively reviewed,” he said.

Aurangzeb said that he has observed “selective interpretation and selective reading” in the latest report on SOEs, which are contrary to the facts.

“The first thing is that if we look at the aggregate losses and the annual losses of the state institutions, they have declared, they have been declining over the last three consecutive years,” he said.

“In 2023, the aggregate losses were Rs905 billion, which declined to Rs851 billion in the FY24, and last year it was Rs832 billion. So, if we see that over the last 3 years, the losses have declined by Rs74 billion,” he added.

The minister noted that despite the losses, some SOEs remain profitable, i.e. the oil and gas sector. “Their profitability has decreased as global oil prices have gone down, although their operational aspects are improving,” he said.

The minister said that apart from outflow, we should see how much money the government is getting back from these institutions in the form of dividends, taxes, and mark-up paid.”

Aurangzeb said that last year, the outflow from SOEs was about Rs2.078 trillion while the inflow was Rs2.119 trillion. “There is a positive inflow of Rs40 billion to the Government of Pakistan,” he said.

Aurangzeb shared that the government has taken steps to improve the governance of these institutions. “The prime minister is personally leading this effort, with the support of the cabinet,” he said.

On Saturday, Aurangzeb announced that Prime Minister Shehbaz Sharif will soon unveil a relief package for the construction sector. The minister also revealed that the government is considering reducing tax rates for the property sector and will announce a relief package for the textile industry within the next ten to twelve days.