ISLAMABAD   -  The Senate on Friday unanimously passed the State-Owned Enterprises (Governance and Operations) Amendment Bill, amid reservations of the opposition Pakistan Tehreek-e-Insaf (PTI) that the move was aimed at selling off public sector entities at throwaway prices.

The law has empowered the government to remove members on the board of directors (BoDs) of the state-owned enterprises (SOEs).

At the outset, the PTI criticized the proposed law saying the design behind it was to remove all hurdles for the privatization of SOEs. But some better sense prevailed at the end as no party opposed the bill when it was put to voice vote while PTI lawmakers were on a protest walkout at that time.

Minister for Law and Justice Azam Nazeer Tarar on behalf of the minister for finance moved the motion for consideration of the bill.

The minister said that amendments were being introduced to enhance the efficiency of boards of all SOEs besides ensuring good governance. He said that the purpose was to decide a mechanism of removal of those directors on boards who either usually remained absent in meetings or gave no input. In the proposed changes, future board directors, including government and independent members, would undergo performance evaluations by the board’s nomination committee. After this, recommendations for removal would be sent to the federal government for approval.

The act would empower the government to nominate independent directors through an institutionalized mechanism and make criteria for the security of their tenure, their removal and to make appointment of chief executive officers on the recommendations of the boards.

The Parliamentary Leader of PTI in the House Syed Ali Zafar voiced his concerns saying that the government through the law wanted to remove directors on BoDs and replace them with their favourites only to sell off some profitable SOEs. He said that some of the incumbent directors had opposed the privatization of power distribution companies, alleging that the government had undervalued their assets before their sell off.

Senator Ali said the law, if passed in the present form, would take away the currently secured three-year term of board of directors of SOEs.

Law Minister Tarar in his response said that the appointing authority always had the powers to remove and insisted that the amendments were just meant to ensure better governance and transparency in SOEs, which was the need of the hour.

Leader of the House in the Senate Ishaq Dar assured that the privatization process would be taken forward in a transparent manner.

“As Chairman of Cabinet Committee on Privatization (CCoP), I will not entertain anything which is beyond any rules, process and transparency,” he said, adding that the CCoP would be the first hurdle in the way of privatization if any transaction lacked transparency and due process was not followed.

Dar, who is also the deputy prime minister, said hundreds of billions rupees had been lost because privatization of Pakistan Steel Mills (PSM) could not be materialized. He said that there were some basic flaws in the agreement signed with a UAE-based company Etisalat by then General Pervez Musharraf regime. The company has yet to pay over $ 800 million to Pakistan due to a property-transfer dispute, he added.

The leader of the house proposed formation of a special committee to ascertain why the privatization of PSM did not occur, resulting in huge losses to the national kitty.

At the end, a number of PPP senators speaking on points of public concern marked July 5 as the ‘black day’ when martial law was imposed in the country by overthrowing the elected government of former prime minister Zulfikar Ali Bhutto. They paid rich tributes to the PPP founder Bhutto and slain party leader Benazir Bhutto for their sacrifices for the country’s democracy.

Chairman Senate Syed Yousaf Raza Gilani in his concluding remarks said all political forces of the country had joined hands to sign a Charter of Democracy (CoD) in 2006, which paved the way for the revival of the 1973 Constitution in its original form. He added that the country’s present weak democracy was indebted to this event.