ISLAMABAD: After more than two years in office, the federal cabinet would be starting on Tuesday the process for appointment of regular/fulltime chief executive officers (CEOs) of power distribution companies (Discos) and approve selection of managing directors of two gas utilities.

This comes on the heels of over Rs2.3 trillion circular debt in the power sector as of Sept 30, 2020, and about Rs350bn circular debt in the gas utilities — Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL) — up from Rs1.2tr and about Rs120bn in 2018, respectively.

The federal cabinet will meet on Tuesday. Prime Minister Imran Khan will preside over the meeting that has seven agenda items relating to filling of top positions — chief executives, managing directors and boards of directors — of the state-owned entities (SOEs).

In addition, the cabinet will review utilisation of PM’s Covid Relief Fund, Ehsaas Kafalat Payments and Ehsaas National Socio-Economic Survey, funds provided by the federal government to the provinces and resources generated by the provinces themselves.

Review of utilisation of PM’s Covid relief fund also on agenda of meeting

The cabinet would consider appointment of CEO of Ignite — company of the ministry of information technology, members of the board of directors of Public-Private Partnership Authority (PPPA), board of trustees of Employees’ Old-age Benefits Institution and Community Welfare Attaches in Pakistan missions abroad.

Sources said the cabinet is expected to approve appointment of Amir Tufail and Javed Hamdani as managing directors/CEOs of SNGPL and SSGCL, respectively. They said a selection committee had prioritised Mr Tufail and Mr Hamdani as first and second option for SNGPL. Similarly, Mr Hamdani and Amin Rajpoot are on first and second positions for SSGCL. Logically, Mr Tufail and Mr Hamdani being on top positions of the panel for SNGPL and SSGCL, respectively, would be selected as MDs unless something political crops up during the meeting.

The cabinet is also expected to clear an advertisement for the posts of CEOs of Discos. Almost all the existing CEOs of Discos are working on stop-gap arrangements of the Pakistan Electric Power Company (Pepco) — a defunct entity which has itself seen cycles of abolition and revival over the past decade and is being run on additional charge basis by the officers of power division. This has practically limited the operational independence of board of directors and CEOs of Discos and compromised their performance.

Chairman of the Cabinet Committee on Energy and Planning Minister Asad Umar had announced a few days ago that the power centre in the Pakistan Secretariat to control power companies would be abolished. Under the corporate rules of the Securities and Exchange Commission of Pakistan (SECP) for SOEs, the selection of CEOs of Discos is required to be made through a competitive process by their respective boards of directors.

The sources said the federal cabinet had in the last week of October ordered that all existing vacancies of CEOs or MDs or heads of various SOEs should be filled within three months. Otherwise the ministers and secretaries of the ministries and divisions would be held responsible or they should report in advance within a week why such posts could not be filled in three months.

Some of the ministries tried to extend the deadline but the move was rejected by the Prime Minister’s Office. In case of the Islamabad Electric Supply Company some influential personalities have reportedly advocated grant of extension to the existing CEO on retirement.

The SECP rules also laid down criteria for appointment of CEOs of SOEs, including condition of premature retirement or resignation from current job of officers working in the government or armed forces for appointment as the CEOs. A selection committee headed by the minister-in-charge has to set the evaluation parameters with the approval of the cabinet in line with the fit and proper criteria SOEs.

Under those standards, the candidates’ financial integrity has to be determined through financial statements, tax returns and wealth statements, etc, which should be on record besides the credit information bureau’s report about payments due to financial institutions, etc. In case an officer working in the government or armed forces is selected for the job of chief executive, he/she would have to seek premature retirement or resign from his position.

For the appointment of chief executive in a public sector company on the nomination by the federal government, there shall be a selection committee constituted for the purpose of shortlisting and recommending the suitable candidates. The boards will lead the selection process and send a panel to the ministry concerned for approval of the prime minister.

The ministry concerned is required under these rules to place a public advertisement, at least three months before expiry of the term of office of the existing chief executive, in the leading newspapers and post advertisement on the relevant websites of the government and the respective public sector company. This basic requirement has mostly remained unimplemented over the past couple of years and most of the positions are run on ad hoc basis.

Published in Dawn, December 14th, 2020