Islamabad:
As the first year of the $ 7 billion (IMF) program (IMF) ends, the government has not failed to bring state -owned companies (SOEs) under a new legal framework that violates its obligations due to opposition from these public sector companies.
The course of a recently held preparatory meeting for the upcoming IMF review interviews for the $ 1 billion loan tank revealed that there was almost insignificant progress in improving the management of the public sector company and regulatory bodies, the Finance Minister’s sources told Express Pakinomist.
They said devices like Water and Power Development Authority (WAPDA), Pakistan Telecommunication Corporation and Pakistan Railways did not fully cooperate to change their laws to separate political decision -making from operations.
A year ago, when the IMF board approved the Bailout package of $ 7 billion for a period of three years, Prime Minister Shehbaz Sharif’s government promised to tackle deficiencies in the legal framework for SOEs. The idea was to introduce international best practices to stem the losses and improve the supply of service.
But the government failed on both fronts. It did not improve the legal framework for SOEs or managed to privatize any entity in the first year of the IMF program. After completing a year of the program and receiving $ 2 billion out of $ 7 billion, progress will remain limited to fiscal indicators.
Even on this front, despite reaching the primary balance goal through higher revenue collection and fiscal adjustments, public debt burst both in absolute terms and as a proportion of the economy of the last financial year, considered a double danger. Relationship with debt to GDP increased over 70%, while the debt burden rose to RS80.5 trillion.
The government had promised the IMF that, as part of the implementation of SOE reforms, it would extend state-owned companies (governance and operations), 2023 and SOES (ownership and management) Politics, 2023, to 10 more entities to strengthen performance, transparency and governance.
These devices include Exim Bank of Pakistan, National Bank of Pakistan (NBP), State Life Insurance Corporation, Pakistan Railways, Wapda, National Telecommunication Corporation, Gwadar Port Authority, Karachi Port Trust and Port Qasim Authority.
Last month, Finance Minister Muhammad Aurangzeb wrote to other ministers from the maritime affairs, water resources, information technology and telecommunications communication and the Ministry of Commerce and urged them to fulfill IMF conditions by making the necessary legal changes before the IMF team’s visit.
The IMF delegation arrives in Pakistan and holds its first round of discussions with the central bank on September 25 -the same date that the IMF board approved the loan package a year ago. After discussions with the central bank, negotiations with the federal government begin from September 29.
Out of the units listed, two fall under the Ministry of Finance’s administrative control: NBP and Exim Bank. Instead of changing their laws to tackle government issues, the Ministry of Finance has only managed to complete the Exim Bank Draft Bill proposal.
Sources said that amendments to the NBP Act remain pending until legal changes have been made to Pakistan SOVEREIGN WEALTH Fund Act. The government previously exempted NBP and six other units from the SOE law by placing them under the SOVERIGN WEALTH FEEP.
The original deadline to change the SOVERIGN WEALTH Fund Law was December last year, now expanded to March 2026.
The IMF has told Pakistan that SOVEREIGN WEALTH Fund should only become operational after the management protection measures for the fund and SOEs are transferred to the one who adapts to the new SOE management framework.
For this, the government also has to change the wealth fund to clarify its mandate and strengthen government schemes, according to the IMF’s latest report.
Sources also mentioned the reluctance of WAPDA, which has not yet share a draft of the new changes. These legal changes are needed to review its current administrative structure, dominated by the chairman of the authority.
The WAPDA spokesman did not respond to a request for a comment on the delay in making the required changes that are in violation of IMF conditions.
Similarly, the Ministry of Information Technology has not shared draft changes to Pakistan Telecommunication (Re-organization) ACT, 1996.
However, draft changes to Port Qasim Authority Act 1973, Gwadar Port Authority Ordinance 2002 and Karachi Port Authority ACT 1980 have been completed, but is still awaiting parliamentary approval.
