ISLAMABAD: The National Assembly’s Standing Committee on Finance on Monday did not approve four key government bills, including those on fiscal responsibility and debt limitation and management of state-owned enterprises, required under the ongoing programme of the International Monetary Fund (IMF).

The committee meeting, presided over by PTI MNA Faiz Ullah, discussed the State-Owned Enterprises (SOEs) Governance and Operations Bill, 2021 but decided to defer it after the members opposed allowing hundreds of entities to have their own procurement rules.

The members agreed that uniform procurement rules as were applicable at present under the Public Procurement Regulatory Authority (PPRA) had limitations to effectively deal with all state owned entities and get the best out of public money but it was also another extreme to allow different SOEs to set their own procurement rules.

Govt slammed for its failure to control circular debt

The committee members expressed serious reservations over giving powers to the SOEs for making independent procurement policy. The Ministry of Finance told the committee that more than 95 per cent losses in the SOEs sector were flowing from power distribution companies (Discos), Pakistan International Airlines (PIA) and the National Highway Authority (NHA). Net SOE losses stood at Rs141bn fiscal year 2018-19.

Talking about the accumulative losses, the finance ministry reported major chunk of total losses in that year amounted to 500bn with major chunk of almost Rs400bn from Discos besides PIA and NHA etc while over Rs300bn worth of profits came from oil and gas sector, particularly the Oil & Gas Development Company Limited (OGDCL) and Pakistan Petroleum Limited (PPL). The SOEs losses were causing fiscal problems, the committee was informed.

It was reported that out of a total 215 SOEs, 84 were commercial in nature and remaining were either their subsidiaries or non-commercial. The proposed, it was explained would provide a legal framework for their monitoring and had nothing to do with their business plans.

Secretary Finance Hamid Yaqoob Shaikh said the main objective of the bill was to provide institutionalised monitoring structure to reduce their losses.

PPP MNA Syed Naveed Qamar said it was unfortunate that the government had been unable to control the circular debt and the losses of the SOEs. As some other members suggested the haste being shown by the government for the approval of the proposed SOE law from the panel appeared some deadlines were being met, Mr Qamar said the bill had been brought before the committee on the instructions of the IMF.

PPP MNA Hina Rabbani Khar said although they had problems with the PPRA rules and wanted these to be reformed but a normal standard should be followed across the board, with some specific exemptions in peculiar cases.

The members suggested that there was a need to reformulate this specific section and directed the ministry of finance to come back to the committee in its next meeting on Wednesday for approval with consensus after addressing key concerns of the members.

The NA committee was also given presentation on the Fiscal Respon­si­b­­ility and Debt Limitation (Amend­ment) Bill, 2021. It was explained that at present, the government guarantees stood at 6pc of GDP and total stock of the public debt at 72pc.

In the proposed bill, the limit on stock of outstanding guarantees had been proposed to be increased to 10pc of GDP from existing six percent. Likewise, the limit on stock of the total public debt and guarantees was proposed at 70pc of the GDP in the new bill. The meeting decided to defer the approval of the proposed bill till its next meeting for further deliberation.

The meeting was also given a briefing regarding Export-Import (EXIM) Bank of Pakistan Bill, 2021 and decided to defer it till its next meeting for thorough study of the bill by the members to enable them come up with valuable input. EXIM Bank CEO briefed the committee regarding the bank’s establishment, capital, purpose and power, management and accounts and finance.

Another bill “The Modaraba Companies (Floatation and Operations) (Amendment) Bill, 2021 (Government Bill)” was also deferred till the next meeting on the request of the Securities & Exchange Commission of Pakistan.

Published in Dawn, February 15th, 2022