In a recent move, the government has announced plans to dismantle all non-essential SOEs to streamline operations and reduce costs. Federal Minister for Maritime Affairs, Qaiser Ahmed Sheikh, has highlighted the importance of privatizing these non-essential SOEs as a step toward achieving better governance. He expressed that by transferring these organizations to the private sector, the government could significantly improve their efficiency and performance.
Additionally, this move would relieve the government of the extra burden that managing these enterprises places on its systems, allowing it to concentrate more effectively on other pressing issues and public services. Sheikh’s remarks underline the ongoing debate about the role of non-essential SOEs in the economy and the potential benefits of privatization for the country’s overall governance.
Privatization of non-essential SOEs is being considered as part of the government’s strategy to improve efficiency. While talking at a news show at Dawn news, Sheikh stated, “These institutions, for the most part, generate losses and perform poorly. They bring no benefit, and people aren’t satisfied with their service. There are few that serve a strategic purpose… we need to downsize to ensure better governance.”
The closure of non-essential SOEs is expected to alleviate the financial burden on the government. Recently, the government decided to scale back on offering new jobs, and privatizing SOEs would further support this strategy by easing the financial burden. By focusing resources more efficiently, the government aims to streamline operations and allocate funds where they are most needed.
He further stated, “We are either going to merge one ministry with the other, or we’ll reduce the number of divisions within them. The federal government needs to focus on good governance, so it will only control those institutions that serve a strategic purpose.” Moreover, he asserted the fact that, “We have banned [offering] jobs as a means to cut down on spending. Our institutions run on tax revenue and so far, we are generating losses. We aim to maintain a very lean government.”
It is pertinent to mention here that closing the Utility Stores Corporation (USC), which operates as a state-owned enterprise, would significantly impact lower to middle-class families who rely on these stores for their groceries. This potential move could trigger public backlash. However, Minister for Industries and Production, Rana Tanveer Hussain, has dismissed claims that the government plans to shut down all utility stores. Instead, he clarified that the government’s intention is to “restructure” these organizations, not close them, aiming to improve their efficiency while still serving the needs of the public.
Rana Tanveer Hussain said, “The decision has been made to close the USC and the Public Works Department. We are taking SOEs that are not strategic and intend to either privatize them or operate them under a public-private partnership.”
