Govt to Wind Up PASSCO And Create New Company to Settle Its Rs. 121 Billion Debt

The federal government has moved ahead with the winding up of Pakistan Agricultural Storage and Services Corporation Limited, which faces a residual liability of approximately Rs. 121 billion after adjustment of its wheat stocks, receivables and assets. To settle this outstanding liability in an orderly and fiscally responsible manner, the government has decided to establish a Special Purpose Vehicle titled Wheat Stocks Management Company Public Limited. PASSCO had for decades been responsible for procuring wheat to maintain national strategic reserves. In line with the federal government’s revised role in wheat sector operations, the Prime Minister’s Office issued directions on 12 September 2024, 21 March 2025 and 25 August 2025 for the structured winding up of PASSCO and for the development of an alternative mechanism for managing strategic wheat reserves. A committee led by the Finance Minister held five meetings on 2, 5, 11 and 19 September and on 10 October 2025 to deliberate on the settlement of PASSCO’s liabilities and receivables, disposal of wheat stocks and modalities for the corporation’s closure. PASSCO’s total liabilities stand at Rs. 527.664 billion, out of which Rs. 121 billion is projected to remain after all adjustments. To address this financial gap, Wheat Stocks Management Company Public Limited will be incorporated under Section 32 of the Companies Act 2017 with a mandate to raise long-term financing from banks backed by the Government of Pakistan’s sovereign guarantee. The funds raised will be used exclusively to clear PASSCO’s remaining liabilities. The federal government will then service the debt through annual budgetary allocations over a five to seven-year amortization period. The Economic Coordination Committee has been asked to approve the establishment of Wheat Stocks Management Company Public Limited with an initial paid-up capital of Rs. 1 million and an authorised capital of Rs. 350 billion. The Ministry of National Food Security and Research will prepare incorporation documents for vetting by the Law and Justice Division, while the new company is proposed to receive a reduced incorporation fee of Rs. 10,000 as a fully owned government entity. Additional approvals sought include meeting incorporation expenses through the existing budget of the Ministry of National Food Security and Research, granting the SPV exemption from the State Owned Enterprises Act 2023 due to its non commercial nature and allowing its dissolution through self-liquidation once its mandate is completed. The Secretary of the Ministry of National Food Security and Research, the Secretary of the Finance Division and the Additional Secretary of the Ministry of National Food Security and Research will serve as initial subscribers to the Memorandum of Association, while the Joint Secretary of the Ministry will act as interim Chief Executive Officer until the Board appoints a full-time head. The creation of Wheat Stocks Management Company Public Limited is expected to ensure a smooth transition, settle legacy liabilities, and establish a more streamlined and financially sustainable model for managing Pakistan’s strategic wheat reserves.