The government has turned down a proposal to set up a wheat stock company — a special purpose vehicle (SPV) designed to manage the country’s wheat reserves. The Economic Coordination Committee (ECC) rejected the idea during a recent meeting, where officials emphasized the need for more detailed review.
The Ministry of National Food Security planned to form this SPV to take over PASSCO’s functions as the agency is gradually phased out. The plan included a minimal initial paid-up capital but allowed for up to Rs 150 billion in authorized capital.
Under the proposal, the wheat stock company would raise long-term financing from banks backed by government guarantees. These funds would mainly address PASSCO’s existing debts.
The food ministry also asked for legal approval to draft the company’s memorandum of association, cover registration costs, and bypass certain rules governing state-owned enterprises — arguing the SPV wouldn’t operate commercially.
Officials told the ECC they planned to dissolve the SPV once its mission — managing wheat stock and settling liabilities — was complete, under the liquidation process defined in the Companies Act.
By rejecting the proposed wheat stock company, the government highlights the uncertainty over managing wheat reserves as PASSCO winds down.
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