ISLAMABAD-The government has failed to improve the financial condition of public sector entities (PSEs) as their debt and liabilities had surged to Rs1.711 trillion by the end of June this year.

The PSEs debt and liabilities had almost increased by Rs90 billion in last fiscal year taking the overall debt stock to Rs1.711 trillion, showing annual growth of 5.5 per cent. The debt and liabilities were Rs1.3 trillion in 2018 when the incumbent government had taken the charge. However, it had gone up by Rs400 billion in two years of the incumbent government, according to the latest data of State Bank of Pakistan (SBP).

The breakup of Rs1.711 trillion showed that debt of PSEs is Rs1.49 trillion and liabilities are Rs221 billion by the end of June 2020. The losses and liabilities are equal to 4.4 per cent of the Gross Domestic Product (GDP). In PSEs, the debt of Water and Power Development Authority (WAPDA) has recorded at Rs67.4 billion, Oil and Gas Development Corporation (OGDC) at Rs5.7 billion, Pakistan International Airlines Corporation (PIA) at Rs141.8 billion, Pakistan Steel Mills Corporation (PSMC) at Rs43.2 billion and other PSEs debt has recorded at Rs1.23 trillion by the end of June 2020.

The incumbent government has yet to bring reforms in PSEs as it had announced before coming into power. Former Finance Minister Asad Umar had established Sarmaya-e-Pakistan Limited (SPL) with the mandate to restructure loss-making entities on the pattern of Malaysian and Singapore model. Umar wanted to revive the loss-making PSEs through public private partnership (PPP) mode. However, after inclusion of Dr Abdul Hafeez Shaikh as Adviser to Prime Minister on Finance and Revenues, the government had moved towards privatisation of viable entities.

The government had budgeted Rs150 billion from privatisation programme including privatisation of two RLNG based power plants in last fiscal year. However, it has failed to generate any amount due to COVID-19 that had halted the privatisation programme. The Privatisation Division had shortlisted 10 entities, which are scheduled to be sold out in financial year 2020-21 to achieve budgeted revenue of Rs100 billion. Privatisation Commission is anticipating to sale out much delayed two RLNG power plants 1223 MW Balloki Power Plant and 1230 MW Haveli Bahadur Power Plants, revival of Pakistan Steel Mills plan, SME bank Limited, Services International Hotel Lahore and Jinnah Convention Centre, Islamabad in the second quarter of next financial year or by end of December 2020.

To implement the privatisation programme, the Cabinet Committee on Privatisation (CCoP) in last month (August) had approved the privatisation of eight public sector entities including divesting the shares of Oil and Gas Development Company Limited (OGDCL). Other seven PSEs included Guddu Power Plant (747 MW), Divestment of up to 10 per cent of GOP’s shares in PPL through Public offerings, Services International Hotel (SIH) Lahore, Jinnah Convention Centre, divestment of up to 20 per cent shares of Pakistan Reinsurance Company Limited held by GoP, House Building Finance Company Limited (HBFCL) and e) First Women Bank limited.