Petroleum Ministry takes notice of austerity drive violations in its subordinate depts

ISLAMABAD: The senior officials in subordinate departments and State Owned Enterprises (SOEs) are violating government austerity drive principles. Despite government’s huge financial support to these entities, their performance is unsatisfactory and incurring hundreds of billions of rupees net loss.

The Petroleum Division has received some complaints that the top officials in some of its subordinate entities/SOEs are violating the principles of austerity introduced by Imran Khan government.

In June 2020, a task force on austerity and government restructuring led by Dr Ishrat Hussain finalised its recommendations, which were presented before the Cabinet Committee on State Owned Enterprises (CCoSOEs). One of the key points of this task force’s recommendations was to squeeze the current expenditure of the government and end the culture of unnecessary protocols. However, according to reliable sources, the top officials in subordinate departments/SOEs of various ministries and divisions are violating the principle of present government’s austerity drive and demanding protocols from their juniors.

In a letter dated August 19, 2020 written to the heads of 13 State Owned Enterprises (SOEs) working under Petroleum Division has issued an advice to strictly adhere to the policy of simplicity and austerity. “I am directed to refer to the subject noted above and to state that it has been observed that executive/officials of (SOEs) under the purview of this division are not upholding the principles of austerity and simplicity in their official dealings, travel and logistics, which go against the current government policy of austerity drive and the COVID-19 imposed recession in the current environment”, the official letter says.

“The division advised that this practice needs to be discouraged and curtailed by the administrative heads of the respective organisations/entities that are principally bound to lead by example. It is, therefore, directed that the entities may strictly adhere to the present government’s stance of austerity in their own conduct and official dealings”.

Taking to The News, Adviser to Prime Minister on Institutional Reforms and Austerity Dr Ishrat Hussain said the government has reduced the administrative budget last year as well as in the current fiscal year. The current expenditure of the government departments will be reduced gradually. “We have recommended abolishing the 71,000 jobs lying vacant in the government departments. All the extra vehicles of various government departments, which were scattered in Islamabad have now been shifted to one place. The government has imposed ban on the import of new vehicles for the officials. All these measures have resulted in squeezing the current expenditure”.

Talking about the austerity recommendations for future, Dr Ishrat said, “We have recommended that those officials who retires from now on their post will not be filled. Similarly, there are 440 organisations in the government, which will be reduced to 320 that means 120 organisations will no longer be working for the government”.

When asked about the Petroleum Division’s letter to the heads of SOEs, he said the SOEs are autonomous and their boards are fully empowered. If any head of the government entity is violating the principles of present government’s austerity drive, the board of respective entity can make that official answerable.

Petroleum Division Spokesperson Joint Secretary Sajid Qazi while talking to The News said the main purpose of this letter was not to embarrass the officials but to issue a general advice to the heads of SOEs to strictly adhere to the principles of austerity.

When asked if there were any complaints of violation of austerity drive introduced by the present government, he said there were no such complaints against any official at all. If there had been any complaint against any head of the SOE or top official, the ministry would have issued a separate letter to the particular company or official. The said letter is a general reminder, which is addressed to all the heads of the subordinate departments. It is important to mention here that on June 24, CCoSOEs under the chair of Adviser to Prime Minister on Finance Dr Abdul Hafeez Sheikh was informed by Ministry of Finance that around 85 SOEs are working under the administrative control of 19 federal ministries/divisions but the overall performance of the SOEs had remained unsatisfactory despite considerable financial support provided by the federal government from time to time.

“The meeting was further informed that during fiscal year 2017-18 an amount of Rs143 billion was provided to various SOEs as subsides, Rs204 billion as cash development loan, Rs27 billion as equity injection and GoP guarantees amounting to Rs308 billion were issued. Despite such a large support, the SOEs sector as a whole registered a net loss of Rs265 billion”.

“The Ministry of Finance in its presentation attributed the poor performance of the SOEs to various factors, particularly redundancies and duplications, a completely decentralised governance framework with lack of inter-agency coordination, excessive interference and over-regulation by multiple government agencies and lack of technical expertise and specialised skills in the line ministries for the management of commercial SOEs”, says the handout issued by Finance Division on June 24.