Govt faces setback as Senate panel rejects SOEs bill

Our Correspondent
Thursday, Sep 22, 2022

ISLAMABAD: The government faced a setback on Wednesday when a Senate panel rejected the State Owned Enterprises (Governance & Operation) Bill by majority, making it hard for the government to meet a major condition of the IMF. Chaired by Saleem Mandviwalla, the panel rejected the SOEs bill by majority vote.

PTI Senator Shaukat Tarin abstained from voting, while PMLN Senator Saadia Abbasi argued that the government should present its own fresh bill instead of approving the one introduced by the PTI government.

Enhancing the SOEs’ governance, transparency, and efficiency as well as limiting their fiscal risks has been a part of the structural benchmark (SB) of the IMF program. The IMF in its last review stated that the National Assembly adopted the new SOE law in July 2022, which now awaits Senate adoption (end-June 2022 as Structural Benchmark (SB) reset to end-September 2022).

This will also help advance the authorities’ ongoing efforts to (i) develop, with the support of the ADB, a new ownership policy; (ii) amend several SOE-dedicated Acts; (iii) operationalise a central monitoring unit (CMU) within the Ministry of Finance by January 2023 (new end-January 2023 SB); (iv) gradually reduce the footprint of the state in the economy (based on the SOE Triage from March 2021 and including the divestment of two LNG-based power plants, one development finance institution, and one small public bank); and (v) continue with regular and timely audits of key SOEs.

The panel discussed the matter of overcharge on the issuance of LCs by banks. Senator Shaukat Tarin apprised the committee that owing to this incurring problem, traders had been making payments from Dubai accounts for goods imported from Shanghai. He added banks had issued LCs on Rs240 or above when dollar valued at Rs230 in interbank and profit of banks had increased around 100 percent.

Officials of UBL and Bank Al Habib told the committee that they suffered a loss of around Rs700 million and Rs500 million respectively in August. Dr. Inayat Hussain, Deputy Governor SBP, told the committee that the State Bank had initiated an inquiry and the report will be presented before the committee.

The unprecedented rise in dollar value was also deliberated. Senator Shaukat Tarin inquired as to why dollar value was rising even after the IMF bailout.

Aisha Ghaus Pasha, State Minister for Finance and Revenue, maintained that the flood had further hurt the economy and the government was in negotiations with Saudi Arabia and Qatar for investment in key sectors in order to provide strength to the dwindling economy.

Saleem Mandviwalla said, “Bangladesh has more reserves than Pakistan but they had taken more stringent measures than us”. He suggested that restrictions should be put on use of fuel for cars and bikes as a large sum was being spent on payment of fuel imports.

Senator Faisal Saleem Rehman highlighted the issue of tobacco farmers of KP who were forced to leave the business due to heavy taxation. He informed the committee that around 5 lakh farmers had been affected by hefty taxes. The chair decided to form a sub-committee to investigate the matter and present its report before the Senate body.

Furthermore, the committee also discussed the matter of harassment of citizens by FBR officials. Senator Afnan Ullah Khan said he was the covering candidate for his late father in the Senate elections and the FBR decided the matter ex-parte without serving any prior notice. He filed a case with the revenue tribunal and the court decided the matter in his favour. Asim Ahmad, Chairman FBR, informed the meeting that an inquiry will be conducted into the matter and the committee will be apprised of facts within one month.

The panel also deliberated on a public petition for regularisation of outsourced staff of the National Bank of Pakistan. Rehmat Ali Hasnie, President NBP, apprised the panel that the matter was pending with the Islamabad High Court due to which the NBP could not shed light on it. The chair disposed of the matter.

Deliberating on a decision by the Civil Aviation Authority regarding declaration of foreign currency by inbound international passengers, Asim Ahmad, Chairman FBR, informed the panel that the matter doesn’t come within the ambit of Civil Aviation Authority. He said the State Bank of Pakistan had issued a notification in 2012 in which the passengers carrying 10,000 dollars or more were required to make a declaration and the customs department had also issued a similar notice in 2018 but the threshold was not specified in it. He added that the declaration letter will be available on an App by the 30th September.