A report titled ‘Federal Footprint State-Owned Enterprises (SOEs) Consolidated Report FY2020-22’ released by the Ministry of Finance last month says that the cumulative losses of 31 entities totalled Rs730.26 billion in 2021 — an increase from the previous cumulative loss of Rs665 billion of 25 entities in 2021. This proves that profitable enterprises dropped from 56 in FY21 to 50 in FY22.

Reforms and restructuring have already started under the State-owned Enterprises (Ownership and Management) Policy 2023, which aims to enhance the governance and operations of SOEs by ensuring transparency, professionalism, and effective management, while also addressing concerns of political influence and inefficiencies in these entities, by April 2024.

The most pressing questions are: when will the board nomination committee (BNC) in the relevant ministry/division be activated? And when will the BNC ensure compliance with the policy guidelines by making a proposal for the boards governing SOEs?

As the country remains stuck in bureaucratic hurdles that impede the implementation of the SOE policy, it simultaneously continues to dream of stemming the rot in our DISCOs. The ambitious goals include: privatizing them, introducing changes to the board of directors, and empowering CEO/management.

The authorities concerned also aim at establishing performance management units in five high loss-making power distribution companies to improve operations. This is a home-grown solution to improve instead of going with privatization.

Privatization efforts — despite the fact that the government recently had a successful sale of its holding in the Heavy Electrical Complex (HEC) which is the first case of the privatization of an SOE since 2015 — are not helpful in rebuilding confidence. The privatization process was finalized in the fifth attempt after a 14-year-long process. The cabinet’s approval was finalized........

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