Strict cost cutting measures to be implemented by SOEs

The Privatisation and Corporatization Board (PCB) has instructed government owned companies to implement strict cost cutting measures to reduce their operational expenses.

The circular issued by PCB highlighted the importance of reducing the running costs of state owned enterprises (SOEs) in line with the government's expense reduction efforts.

Instructions given by the board include reduction of domestic travels as well as staff expenses.

During this time, companies are limited to necessary domestic and international travel, with SOE's urged to hold meetings with foreign suppliers via online platforms.

The circular also asked companies not to travel in first class if the duration of essential official trips exceeds six hours and to reduce their expenditure on sponsored trips. Companies are to opt for ferry transportation whenever it is possible as well.

PCB also gave instructions on participating in seminars and fairs, where SOEs are to only participate if there are direct benefits to the companies from such events.

To reduce staff costs, PCB is also limiting the hire of new employees to only essential staff and no changes in salaries and allowances are allowed without the board's permission. PCB also asked to not have employees work overtime, and to stop paying salaries and allowances in dollars while also having qualified employees from the organisation to conduct trainings.

According to the circular, companies are also required to plan efforts to be digital as much as possible to reduce electricity costs as well as paper and stationery. Companies are also asked to keep their procurement expenses in line with the company's annual procurement and to reduce their expenditure on CSR and sponsorship.

Considering the country's current financial situation, the government said they taking serious measures to reduce expenses. This includes merging and transferring some companies as subsidiaries of other companies. Alongside this, government said they will be implementing more expense cutting measures in the coming days.