ISLAMABAD:The government outstanding financial guarantees against eight loss making Public Sector Enterprises (PSEs) have been recorded at Rs 568.2 billion at the end of October 31, 2010.According to the estimates of the Ministry of Finance, outstanding guarantees extended to PSEs amounted to Rs 568.2 billion, which include guarantees in domestic currency of Rs 326.3 billion and foreign currency at Rs 241.9 billion. The total guarantees in foreign currency amounts to $2820.1 million by the end of October 2010.It is important to mention here that the government has already missed the deadline for the phased administrative restructuring of the eight PSEs. The timeline for the completion of the restructuring was from March 31, 2010 to September 1, 2010.The entities approved for restructuring include Pakistan International Airlines Corporation, Pakistan Railways, Pakistan Steel Mills Corporation, Pakistan Electric Power Company Limited, Trading Corporation of Pakistan, Pakistan Agriculture Services and Storage Corporation, Utility Stores Corporation and National Highway Authority.
The deadline for restructuring is related to the change in the board of directors, appointment of new managing directors, CEOs and directors, approval of restructuring plans and start of the implementation plans.According to the deadline, the federal government, following approval of Prime Minister, was tasked to initiate the process of making changes in the board of directors of all the eight PSEs by September 01.Almost all the existing boards had to be dissolved and the new chairmen and members were to be appointed in all the enterprises mainly from the private sector.Services of experts were to be hired and even foreigners were to be appointed to head the boards of key PSEs. Appointments of chief executive officers and chairmen in the PSEs were to be completed by May 30, 2010 and they were to be assigned the task to prepare the restructuring plans of the respective PSEs.
The Cabinet Panel, after completing the review of the proposed restructuring plans of the PSEs was asked to approve these by August 31. After receiving formal approval from the prime minister, the new management in all the eight PSEs was to be given the task to implement restructuring plans from September 1 onwards to bring such PSEs out of the financial crisis and make them viable for privatization under the public-private partnership (PPP) mode.Slow movement in the restructuring of the PSEs at Economic Reforms Unit at Ministry of Finance had irked the Privatization Commission and PC Board in its board meeting to re-launch the convertible bonds proposal to strengthen PSEs in the given situation and to generate revenue for the government.According to the PC’s estimates this activity can turnaround the Rs 265 billion loss making units into Rs 500 billion profitable units – Sananews