The Asian Development Bank (ABD) will provide a loan of $300 million to Pakistan to help the government improve the performance of public sector enterprises which are causing loss of billions of rupees to the national exchequer.
The loan agreement signed recently in Islamabad will cover the second phase of the Public Sector Enterprises Reform Program by enabling the government to sustain reform initiatives by improving their corporate governance and accountability, and reducing their contingent liabilities.
To facilitate GOP’s reform initiatives, ADB approved Subprogram-1 of the Programmatic Approach in June 2016. Subprogram-2 will carry forward all the reforms initiated under Subprogram-1 to its logical conclusion.
Some of the reforms already initiated under subprogram 1, by their very nature, have a long-term implementation cycle. These reforms will need to be carried forward. A continued assistance for such reforms would consolidate and sustain gains made towards better performance of the federal PSEs.
An IMF report last year revealed that three public sector entities – the Pakistan International Airlines, Pakistan Railways and Pakistan Steel Mills – alone have caused over 700 billion rupees in losses to the national kitty.
In addition to that, power sector companies in the public sector have accumulated debt of about 660 billion rupees, more than half of it happening in the last three years.