New year’s first meeting also approves off-grid gas sales, captive power tax changes
Prime Minister Shehbaz Sharif chairs a federal cabinet meeting on January 1 Photo: Prime Minister’s Office
A new local government system will be introduced in Islamabad following the Federal Cabinet’s approval of decisions taken by the Cabinet Committee on Legislative Cases (CCLC), including actions under the Islamabad Capital Territory Local Government (Amendment) Ordinance, 2025.
Addressing the first federal cabinet meeting of the year on Thursday, Prime Minister Shehbaz Sharif congratulated the cabinet members on the new year and stated that the privatization of Pakistan International Airlines marked significant progress in the government’s commitment to privatize state-owned enterprises.
Prime Minister Muhammad Shehbaz Sharif chairing a meeting of the federal ministries on implementation of economic governance reforms.
(Islamabad: January 1, 2026) pic.twitter.com/OVVB29j16m
— Prime Minister’s Office (@PakPMO) 1 January 2026
The prime minister emphasized that the privatization of state-owned enterprises is part of the government’s broader economic reform vision. He noted that the country’s GDP showed significant growth in the first quarter of the current financial year, describing it as encouraging.
The Cabinet approved the conclusions of the Cabinet Committee on Legislative Affairs in its resolution on December 30, which included actions on the Islamabad Capital Territory Local Government (Amendment) Ordinance.
The amendment, which got President Asif Ali Zardari’s assent on Friday morning, revises the framework for compensation on acquired property. Under the amendment, compensation will not be limited to cash payments and may also be provided in the form of land or other prescribed arrangements. In case of late payment, an additional 8% per year must be paid.
Read: President Zardari approves CDA Amendment Bill 2025
The legislation also introduces provisions relating to persons with disabilities, minors and individuals under legal restrictions, along with clauses intended to protect the rights of landowners.
The Cabinet approved Economic Coordination Committee (ECC) decisions from August 26, which included measures to provide relief to electricity consumers under the Off-Grid (Captive Power Plant) Levy and to develop a strategy for its implementation.
On the recommendation of the Petroleum Division, the Cabinet also approved action to issue a Presidential Order to amend the Off-Grid (Captive Power Plants) Levy Act 2025, which allows third-party sales of gas to off-grid captive power plants.
Prime Minister Shehbaz also spoke about his recent meeting with the President of the United Arab Emirates, Sheikh Mohamed bin Zayed Al Nahyan, which he described as productive in terms of bilateral cooperation and mutual consultation.
Read more: Prime Minister Shehbaz meets UAE President in RYK
The Prime Minister met the President and Ruler of Abu Dhabi of the United Arab Emirates at the Sheikh Zayed Palace in Rahim Yar Khan on Tuesday afternoon to discuss issues of mutual interest. The leaders continued discussions from their last meeting in Islamabad on December 26, when Sheikh Mohamed made his first official visit to Pakistan as president of the United Arab Emirates. The two leaders discussed ways to strengthen cooperation in areas including information technology, energy, mining and minerals, and defense.
Shehbaz also highlighted a telephone conversation with Saudi Crown Prince and Prime Minister Mohammed bin Salman, noting discussions on strengthening economic and strategic ties between the two countries.
