FeaturedNationalVolume 13 Issue # 07

Parallel governance in Punjab

The future of 56 public sector companies, set up by the Punjab government, looks bleak after their creation and functioning have been questioned through a writ petition in the Lahore High Court (LHC). Besides incurring losses of billions of rupees without any work for years, over Rs80b corruption has been detected in the companies.


According to critics, the Punjab government has set up the companies as part of its plan to bypass government institutions and accommodate its blue-eyed persons and bureaucrats at lucrative salaries and perks through privatisation of civil administration. Under the plan, the Punjab government has transferred its functions and powers of local governments to the companies, registered with the Securities and Exchange Commission of Pakistan under the Companies Ordinance of 1984. A brainchild of Punjab Chief Minister Shahbaz Sharif, many companies exist only on paper but their staff has been receiving salaries for over eight years. Besides blue-eyed civil servants, the firms are headed by members of the ruling party. Their boards of directors are also packed with friends of the rulers and their relatives.


The companies include Punjab Saaf Pani Company, Punjab Agriculture and Meat Company, Lahore Transport Company, Lahore Waste Management Company (the company exists in seven big cities), Lahore Parking Company, Multan Cattle Market Management Company, Punjab Livestock & Dairy Development Board, Quaid-e-Azam Solar Power Company, South Punjab Forest Company, Punjab Health Initiative Management Company, Punjab Power Development Company, Quaid-e-Azam Thermal Power Limited, Quaid-e-Azam Hydel Power (Pvt) Ltd., and Punjab Municipal Development Fund Company. Very few people know about their complete list. Even the Punjab chief secretary was not aware of all of them. His “ignorance” came to light when he sought details of all companies from all departments of the province through a circular. He ordered all administrative secretaries to provide him with details in a day. He was also unaware of government officers, who had been hired or deputed to the firms, and about their terms and conditions.


A few days ago, an acting project manager of the Punjab Saaf Pani Company was arrested for corruption of millions of rupees in various clean drinking water schemes. After reports of rising corruption in the companies, the Punjab chief minister constituted a special committee to probe irregularities to cover up the issue. However, the issue also reached the court. On the other hand, the Punjab Finance Department said the companies were not under its direct control and funds were issued after formal approval from departments concerned. According to media reports, over Rs80b irregularities had been detected in the financial affairs of the companies a few months ago, but the government hushed up the issue. It is said the companies were set up to improve governance in the Punjab after Chief Minister Shahbaz Sharif was inspired by the Turkish model. According to estimates, over 40,000 workers have been hired by the Punjab government for the public sector entities.


According to the government’s own record, an officer of grade 20 in one company is drawing Rs200,000 while the other in the same grade is drawing Rs 2 million in another company. Besides hefty salaries, billions of rupees are being spent on foreign tours of the officers. Millions of rupees have also been set aside for the purchase of bulletproof vehicles for officers of the Saaf Pani Company. The company also interviewed candidates in the United Arab Emirates (UAE) for unknown reasons and wasted millions of rupees. Saaf Pani Company CEO Nabeel Javed draws Rs1.4 million in salary. The CEO of the Quaid-e-Azam Solar Power Company draws Rs 1.5 million per month. The CEOs of the Lahore Transport Company, Lahore Parking Company, Lahore Waste Management Company, Punjab Agriculture and Meat Company, South Punjab Forest Company, Punjab Health Initiative Management Company, Punjab Power Development Company, Quaid-e-Azam Thermal Power Limited, Quaid-e-Azam Solar Power (Pvt.) Ltd., Quaid-e-Azam Hydel Power (Pvt.) Ltd., Punjab Municipal Development Fund Company and others are drawing different salaries, some in millions and others in lacs.


It is a fact that the financial rules and regulations that govern government departments do not apply to the companies, though they handle public funds worth tens of billions of rupees. The government believes the companies have helped avoid red-tape of bureaucratic approvals and complete development projects expeditiously. The officers serving in the companies receive incentives in the form of attractive compensations, which are 10 to 15 times higher than their normal salaries. For example, the civil servants serving in energy companies of the Punjab government are drawing Rs1.5-2 million per month in salaries, as compared to salaries of around Rs150,000 to 200,000 for grade-21 and grade-22 officers. According to experts, the legality of a higher salary to a serving civil servant as an executive officer of a limited company is questionable. Under the official rules, a civil servant deputed in a government-owned company is only entitled to a deputation allowance, which amounts to around Rs6,000 and they cannot receive higher emoluments.


Some blue-eyed officers of the rulers are simultaneously enjoying perks and privileges of being CEOs of the companies and government servants. Its perfect example was Ahad Khan Cheema, who was the Lahore Development Authority (LDA) director general, when the Punjab government appointed him the chief executive officer of the Quaid-i-Azam Thermal Power (Private) Limited. He was also allowed to continue to work as LDA DG in addition to his new assignment till the appointment of some senior official as the new LDA chief.


The Punjab government has further curtailed the powers of local governments through the companies, which have failed to deliver. The Saaf Pani Company is the biggest example. It has failed to provide clean drinking water to people of the province but its officers have received billions in salaries and devoured billions more through fraud. According to legal experts, the court will declare the companies illegal. However, people question whether action will be taken against people who created them or not?