Latest news with #MuhammadAurangzeb
Express Tribune
3 hours ago
- Business
- Express Tribune
Govt admits poor SOE governance
The government's fiscal support to SOEs – through grants, subsidies, loans and other injections – exceeded Rs600 billion in six months, equivalent to nearly 10% of total revenue receipts. photo: FILE Listen to article In a rare statement, a cabinet body on Friday admitted that poor governance concerns persisted with low transparency in government-owned companies while their cumulative losses increased further to a record Rs5.9 trillion by December last year. The statement issued by the Ministry of Finance after a meeting of the Cabinet Committee on State-Owned Enterprises (CCoSOEs) appeared to be a serious charge sheet about the poor performance of SOEs during the July-December 2024 period of the current fiscal year, particularly the power sector performance. The energy-sector circular debt, comprising power and gas, jumped to Rs4.9 trillion by December last year. "Governance concerns persist, with low levels of transparency in beneficial interest disclosures under Section 30 (of the SOEs Act) and other compliance gaps," stated the Ministry of Finance. Finance Minister Muhammad Aurangzeb chaired the meeting. The statement added that "the lack of strategic alignment in business plans and operational inefficiencies across SOEs were identified as critical areas requiring urgent reforms". Muhammad Aurangzeb reaffirmed the government's commitment to strengthening the governance, operational efficiency and financial sustainability of key public sector entities, it said. The finance minister stressed the importance of aligning business plans with national priorities and addressing operational challenges in a timely and coordinated manner. The cabinet committee reviewed the performance of government entities during the first half of current fiscal year, which also coincided with the first year of the government of Prime Minister Shehbaz Sharif. "The cabinet committee noted with concern the staggering cumulative losses of SOEs amounting to Rs5.8 trillion," said the finance ministry. It added that Rs342 billion in additional losses were incurred in just the last six months - equating to a daily loss of Rs1.9 billion. Aurangzeb "emphasised that issues such as inefficiencies in DISCOs' (distribution companies) operations, slow network upgrades by National Transmission and Despatch Company, unfunded pension liabilities and low governance standards continue to erode fiscal space and undermine investor confidence". The finance minister stressed the importance of timely reforms, particularly in power and energy sectors, where circular debt has crossed Rs4.9 trillion, it added. The government reiterated the resolve to bring greater transparency, financial discipline and accountability to the SOE landscape. The finance ministry said that the Central Monitoring Unit gave a detailed briefing on a biannual report on the federal SOE performance covering the period from July to December 2024. The report included a detailed overview of the state of affairs and key challenges confronting state-owned enterprises, including cumulative losses amounting to Rs5.8 trillion, with Rs342 billion being incurred in just six months. The committee was told that circular debt in oil, gas and power sectors crossed Rs4.9 trillion, severely affecting cash flows and asset valuations. The government's fiscal support to SOEs – through grants, subsidies, loans and other injections – also exceeded Rs600 billion in six months, equivalent to nearly 10% of total revenue receipts. In addition, unfunded pension liabilities in DISCOs and other SOEs, estimated at Rs1.7 trillion, remain off the books, as in the case of railways' pension obligations, the meeting was told. It was highlighted that government guarantees currently stood at Rs2.2 trillion, while rollover costs and financial restructuring liabilities further compound fiscal pressures. The finance minister emphasised that directors representing the government on boards of SOEs must exercise due diligence and play an active role in safeguarding the financial health and operational performance of the entities through informed and responsible input. In a recent meeting of the National Assembly Standing Committee on Finance, Muhammad Aurangzeb said that government nominees on SOE boards were performing below requirements and they needed to pull their socks up. The cabinet committee also approved new nominees on various boards. It approved the appointment of chairman of the Quetta Electric Supply Company (Qesco) board, constitution of the board of directors of the Independent System Market Operator, appointment of independent director/chairman on the board of Gujranwala Electric Power Company (Gepco) and independent director on Genco Holding Company Limited (GHCL). It approved the nomination of independent directors on the board of Multan Electric Power Company (Mepco), Power Information Technology Company and the constitution of the board of Energy Infrastructure Development and Management Company. The cabinet body approved the winding up of three subsidiaries of the Ministry of Railways, which included RAILCOP, PRACS and PRFTC.
Business Recorder
4 hours ago
- Business
- Business Recorder
Ministries, divisions: ECC approves 14 summaries seeking TSGs worth Rs2.629trn
ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet on Friday approved 14 summaries seeking technical supplementary grants (TSGs) worth around Rs2.629 trillion for various ministries and divisions to meet the cost of ongoing projects and initiatives during the current financial year 2024-25. The ECC of the Cabinet that met under the chairmanship of Federal Minister for Finance and Revenue Muhammad Aurangzeb also approved natural gas pricing structure for fiscal year 2025-26 which also allowed price of gas for bulk consumers, power plants operating on natural gas and industry to be increased by an average value of around 10 percent. The ECC reviewed and approved several TSGs to meet the cost of ongoing projects and initiatives from different ministries and divisions during the current financial year 2024-25. Ministries & Divs: ECC clears TSG summaries These include, Rs829.67 billion TSG and Rs1,774.20 billion TSG for Finance Division for repayment of domestic debt and for foreign loan repayments respectively, Rs15.839 billion TSG for the Ministry of Defence to cover the shortfall in admissible pay and allowances, in employees-related and non-employees related expenditures and clear the outstanding dues as part of the PM's Package for the martyrs of the recent Pak-India war, Rs63 million TSG for Finance Division to cover the shortfall under unavoidable and mandatory expenditures on account of rent for office and residential buildings of the Department of the Auditor General of Pakistan during the current fiscal year 2024-25. The ECC also approved Rs100 million TSG for Ministry of Foreign Affairs to meet the expenditure under the Head of Account 'Other Delegation Abroad' during the current fiscal year 2024-25, Rs1.765 billion TSG for Ministry of Interior and Narcotics Control to meet the operational requirements as well as to clear the outstanding/pending liabilities of the Frontier Corps KP (North and South) and Frontier Corps Balochistan (North and South) during the current fiscal year 2024-25, Rs300 million TSG for Ministry of Interior and Narcotics Control to clear outstanding liabilities under various Heads of Account of the ICT Police during the current fiscal year 2024-25, Rs100 million TSG for Ministry of Interior and Narcotics Control to clear the outstanding liabilities of various vendors provided services and supplies during the law and order situation in the ICT region during the current fiscal year, Rs52.241 million TSG for Ministry of Interior and Narcotics Control to meet the cost of up-gradation/uplifting and availability of latest investigation equipment and friendly environment at ICT police stations during the current fiscal year and Rs100 million TSG for Ministry of Interior and Narcotics Control in respect of Frontier Corps KP (North) during the current fiscal year 2024-25. The ECC also approved Rs5.5 billion TSG for Strategic Plans Divisions as rupee cover to Pakistan Space and Upper Atmosphere Research Commission (SUPARCO) during current fiscal year 2024-25, Rs117.97 million TSG for Petroleum Division to meet the cost of PSDP project titled, 'Expansion and Up-gradation of Pakistan Petroleum Corehouse' during the current fiscal year 2024-25, Rs254.57 million TSG for Finance Division for onward release to Government of Balochistan in terms of incentive package for PAS/PSP officers posted under it and Rs198 million TSG for Ministry of Interior and Narcotics Control for repair and maintenance of the Executive Building, Islamabad. The ECC also took up a summary submitted by the Petroleum Division, seeking approval for a revised natural gas pricing structure for the fiscal year 2025–26, to take effect from July 1, 2025. Under the OGRA Ordinance, the federal government is required to notify revised consumer gas prices within 40 days of OGRA's determination to ensure cost recovery and regulatory compliance. The submission also aligns with structural benchmarks agreed with the International Monetary Fund (IMF), including rationalisation of captive power tariffs and a shift from cross-subsidies to direct, targeted support for low-income consumers. The ECC considered the proposed adjustments in energy sector tariffs and decided to maintain gas prices to protect household consumers with only fixed charges re-adjusted in domestic sector to recover the asset costs. It also allowed price of gas for bulk consumers, power plants operating on natural gas and industry to be increased by an average value of around 10 percent. The ECC also considered a proposal brought on by the Ministry of National Food Security and Research (MNFSR) for import of sugar to stabilise the sugar prices. The ECC discussed the summary and approved the proposal of the Ministry for constitution of a 10-member steering committee led by Federal Minister for MNFSR and including Federal Minister for Commerce, SAPM to Ministry of Foreign Affairs, secretary Finance Division, chairman FBR and others to come back to the ECC with their recommendations on the matter. The ECC also discussed a summary by the Finance Division regarding changes in the home remittances incentive schemes, and tasked the State Bank of Pakistan and the Finance Division to propose and present a proper plan by 31st July to ECC, ensuring impact analysis and a roadmap for a properly-managed transition. The Cabinet body also considered a summary by the Finance Division for the launch of a risk coverage scheme for small farmers and under-served areas, and accorded in-principle approval to the proposal with instructions for further fine-tuning and incorporating in it additional safeguards before its planned launch on 14th August 2025. The ECC was told that the scheme would likely bring 750,000 new agricultural borrowers into the formal financial system and generate an incremental credit portfolio of Rs300 billion during its disbursement tenure of three years from fiscal year 2026 to fiscal year 2028. The budgetary requirement for meeting risk coverage and operational cost of the banks is estimated to be Rs37.5 billion, spread over fiscal year 2027 to fiscal year 2031. The meeting was attended by several key federal ministers, including Minister for Power Sardar Awais Ahmed Khan Leghari, Minister for Petroleum Ali Pervaiz Malik, Special Assistant to the Prime Minister on Industries and Production Haroon Akhtar Khan, and senior officials from various ministries and divisions were also present. Copyright Business Recorder, 2025
Business Recorder
4 hours ago
- Business
- Business Recorder
State-Owned Enterprises: CCoSOEs concerned over staggering losses
ISLAMABAD: The Cabinet Committee on State-Owned Enterprises (CCoSOEs) on Friday noted with concern the staggering cumulative losses of SOEs amounting to Rs5.8 trillion, with Rs342 billion incurred in just the last six months—equating to a daily loss of Rs1.9 billion. The committee chaired by Federal Minister for Finance and Revenue Muhammad Aurangzeb emphasised that issues such as inefficiencies in DISCO operations, slow network upgrades by NTDC, unfunded pension liabilities, and low governance standards continue to erode fiscal space and undermine investor confidence. The chair also stressed the importance of timely reforms, particularly in the power and energy sectors where circular debt has crossed Rs4.9 trillion, and reiterated the government's resolve to bring greater transparency, financial discipline, and accountability to the SOE landscape. SOEs' performance: PM directs ministries, divisions to implement monitoring system The committee heard a detailed briefing from the Central Monitoring Unit of the Finance Division on a biannual report on the Federal SOE Performance covering the period from July 2024 to December 2024. The report included a detailed overview of the state of affairs and key challenges confronting SOEs, including cumulative losses amounting to Rs5.8 trillion, with Rs342 billion incurred in just six months. The committee was told that the circular debt in the oil, gas, and power sectors had crossed Rs4.9 trillion, severely affecting cash flows and asset valuations. The government's fiscal support to SOEs—through grants, subsidies, loans, and other injections—had also exceeded Rs600 billion in six months, equivalent to nearly 10 percent of total revenue receipts. In addition, unfunded pension liabilities in DISCOs and other SOEs, estimated at Rs1.7 trillion, remain off the books, as do railways' pension obligations, the meeting was told. It was also highlighted that government guarantees currently stand at Rs2.2 trillion, while rollover costs and financial restructuring liabilities further compound fiscal pressures. Governance concerns persist, with low levels of transparency in beneficial interest disclosures under IFRS Section 30 and other compliance gaps. The lack of strategic alignment in business plans and operational inefficiencies across SOEs were identified as critical areas requiring urgent reform. The chair also emphasised the directors representing the government on the boards of state-owned enterprises must exercise due diligence and play an active role in safeguarding the financial health and operational performance of these entities through informed and responsible input. During the meeting, separate summaries submitted by the Power Division for appointment of Chairman on the Quetta Electric Supply Company (QESCO) Board; constitution of the Board of Directors of the Independent System Market Operator (ISMO); appointment of Independent Director/Chairman on the Board of Gujranwala Electric Supply Company (GEPCO) and Independent Director on GENCO Holding Company Limited (GHCL), submitted by the Power Division; and nomination of Independent Directors on the Board of Multan Electric Power Company (MEPCO), Power Information Technology Company (PITC), and constitution of the Board of Energy Infrastructure Development and Management Company (EIDMC), were also discussed and approved. Additionally, a summary moved by the Ministry of Railways for winding up of three railway companies—RAILCOP, PRACS, and PRFTC was also discussed and approved. The finance minister stressed the importance of aligning business plans with national priorities and addressing operational challenges in a timely and coordinated manner. Aurangzeb reaffirmed the government's commitment to strengthening the governance, operational efficiency, and financial sustainability of key public sector entities. Federal Minister for Power Sardar Awais Ahmed Khan Leghari, Minister for Maritime Affairs Muhammad Junaid Anwar Chaudhry, Minister for Science and Technology Khalid Hussain Magsi, and senior officials from relevant ministries and divisions attended the meeting. Copyright Business Recorder, 2025
Business Recorder
4 hours ago
- Business
- Business Recorder
Rs818.79bn supplementary, excess demands for grants okayed by NA
ISLAMABAD: Despite fierce opposition heckling, the National Assembly on Friday approved supplementary and excess demands for grants totalling Rs818.79 billion for the financial years 2023-24 and 2024-25, greenlighting additional spending across federal ministries and divisions. The breakdown reveals Rs398.93 billion in supplementary grants approved for 2023-24, Rs389.86 billion for 2024-25, along with excess demands for grants of Rs30 billion for 2023-24. The documents tabled before the House included the Schedule of Authorized Expenditure for the fiscal year 2025-26, the Schedule of Supplementary Authorized Expenditure for the fiscal years 2023-24 and 2024-25, and the Schedule of Excess Authorized Expenditure for 2023-24. Govt to present Rs203.34bn supplementary, excess grants in NA today Minister for Finance and Revenue Muhammad Aurangzeb laid key budgetary documents before the House in accordance with Article 83 of the Constitution of Pakistan. Aurangzeb expressed heartfelt gratitude to members of both the government and opposition for their active participation and valuable input in the federal budget process for the fiscal year 2025-26. Addressing the National Assembly after the passage of budget, the finance minister said there was no doubt that contributions, and constructive feedback from both sides of the aisle had played a vital role in the successful completion of the budget process. He appreciated members of the treasury as well as the opposition for openly expressing their views during the debate, describing it as a hallmark of democratic culture. He especially thanked the speaker of the National Assembly for allowing the opposition full opportunity to share their opinions, thereby, lending greater legitimacy to the parliamentary proceedings. Senator Aurangzeb also acknowledged the efforts of parliamentary staff, officers, and other government employees who worked diligently throughout the session. He lauded the secretaries and additional secretaries of both the National Assembly and Senate, commending their dedication and professionalism. The minister made special mention of the legislative team that worked tirelessly, often through the night, to ensure error-free documentation of the budget. He also recognised the contribution of the Law and Justice Division headed by Senator AzamNazeerTarar. Further appreciation was extended to the teams of the Pakistan Institute for Parliamentary Services (PIPS), both in the opposition lobby and the National Assembly library, for their constant support and timely assistance during the budget session. In recognition of the relentless efforts of officers and employees of the National Assembly, Senate, and various government departments, the minister announced a special honorarium equivalent to five basic salaries. He also extended gratitude to the Chairman of the Senate Standing Committee on Finance. The grants approved by the House included, Airports Security Force, emergency relief and repatriation, Intelligence Bureau, atomic energy, Pakistan Nuclear Regulatory Authority, Communications Division, Defence Division, federal government educational institutions in cantonments and garrisons, Defence Production Division, Economic Affairs Division, miscellaneous expenditure of Economic Affairs Division, Power Division, Higher Education Commission, superannuation allowances and pensions, grants, subsidies and miscellaneous expenditure, Housing and Works Division, Information and Broadcasting Division, Information Technology and Telecommunication Division, Interior Division, Islamabad Capital Territory, combined civil armed forces, Law and Justice Division, National Accountability Bureau, National Food Security and Research Division, National Health Services, Regulations and Coordination Division, Railways Division, Water Resources Division, federal miscellaneous investments and other loans and advances, development expenditure of ERRA, development expenditure of Suparco, development expenditure of Power Division, development expenditure of Finance Division, development expenditure of Interior Division, development expenditure of Water Resources Division, capital outlay on Maritime Affairs Division, Climate Change and Environmental Coordination Division, Pakistan Post Office Department, defence services, Power Division, Federal Education and Professional Training Division, grants, subsidies and miscellaneous expenditure, Federal Board of Revenue, Foreign Affairs Division, National Commission for Human Rights, National Commission on the Status of Women, Industries and Production Division, Information and Broadcasting Division, Interior Division, combined civil armed forces, National Accountability Bureau, National Food Security and Research Division, National Health Services, Regulations and Coordination Division, development expenditure of Board of Investment, development expenditure of Special Investment Facilitation Council Division, development expenditure of Defence Division, development expenditure of Power Division, development expenditure of Finance Division, development expenditure of Inter Provincial Coordination Division and capital outlay on Civil Works. Copyright Business Recorder, 2025
Express Tribune
10 hours ago
- Business
- Express Tribune
Govt raises gas prices by 10% for commercial users
Finance Minister Muhammad Aurangzeb chairs the Economic Coordination Committee meeting of the Cabinet on Friday, June 27, 2025. Photo: APP In line with structural benchmarks set by the International Monetary Fund (IMF), the Economic Coordination Committee (ECC) of the Cabinet on Friday approved a new natural gas pricing framework, including an average 10 per cent tariff hike for bulk, industrial and power sector users. Meanwhile, to shield domestic users from additional burden, the ECC decided to maintain existing gas prices for households while allowing an upward revision of fixed charges in the domestic sector to recover asset costs. Chaired by Finance Minister Muhammad Aurangzeb, the ECC also approved a summary moved by the Petroleum Division for a revised pricing structure to take effect from July 1, 2025, under the fiscal year 2025–26. Under the new framework, the government will notify revised consumer gas prices within 40 days of a determination by the Oil and Gas Regulatory Authority (OGRA), as required under the OGRA Ordinance. Read More: OGRA greenlights hike in gas price The pricing mechanism is aimed at ensuring cost recovery, regulatory compliance, and fulfilling IMF commitments, including rationalising captive power tariffs and replacing cross-subsidies with targeted support for low-income consumers. In other decisions, the ECC gave in-principle approval to a risk coverage scheme for small farmers and underserved areas, set to launch on August 14. The scheme aims to bring 750,000 new borrowers into the formal financial system through agricultural loans of up to Rs750,000. A total of Rs300 billion in new agricultural lending will be disbursed over the next three years. For risk coverage and administrative costs of banks, Rs37.5 billion will be required between FY2027 and FY2031. Also Read: Double-digit fuel inflation looms The ECC also approved a Rs15.839 billion technical supplementary grant (TSG) for the Ministry of Defence to meet a shortfall in employee and non-employee-related expenditures. The allocation covers dues under the Prime Minister's package for the families of martyrs from the recent Pakistan-India conflict. Additionally, the committee considered a proposal from the Ministry of National Food Security and Research for the import of sugar to stabilise domestic prices. The meeting was attended by Minister for Power Sardar Awais Leghari, Minister for Petroleum Ali Pervaiz Malik, and Special Assistant to the Prime Minister on Industries and Production Haroon Akhtar Khan, among other senior officials.
