ADB to loan $300mn for public sector entreprises reforms

ISLAMABAD: Asian Development Bank (ADB) will provide loan worth US $300 million for Public Sector Enterprises Reform Program (subprogram-2).

The loan agreement was signed by Mr. Tariq Mahmood Pasha, Secretary Economic Affairs Division (EAD) and Ms. Xiaohong Yang, Country Director Asian Development Bank.

The subprogram-2 of the Public Sector Enterprises Reform Program will help the government to achieve and sustain reform initiatives aimed at enhancing the performance of public sector enterprises by improving the corporate governance and accountability.

The program will also reduce contingent liabilities and will facilitate creating fiscal space for critical development expenditures.

ADB approved Subprogram-1 under the Programmatic Approach in June 2016 to facilitate the reform initiative, which will be concluded by under the Subprogram-2.

The Programmatic Approach addresses several important challenges while initiating critical PSE reforms.

It would facilitate coordination across various government departments to implement good corporate governance principles effectively; articulate crucial guiding principles, such as transparency and consistency, on issues related to labour (including retirement benefits); monitor and evaluate PSE performance; and implement critical structural reform in some selected PSEs to get maximum benefits.

Some of the reforms initiated under subprogram-1 have a long-term implementation cycle and need to be carried forward.

A continued assistance for such reforms would consolidate and sustain gains made towards better performance of the federal public sector enterprises.