First meeting of the New Year also approves off-grid gas sales and changes to captive electricity tax
Prime Minister Shehbaz Sharif chairs a federal cabinet meeting on January 1 Photo: Prime Minister’s Office
A new local government system will be introduced in Islamabad after the federal cabinet approves decisions taken by the Cabinet Committee on Legislative Affairs (CCLC), including actions taken under the Islamabad Capital Territory Local Government (Amendment) Ordinance, 2025.
Addressing the first federal cabinet meeting of the year on Thursday, Prime Minister Shehbaz Sharif congratulated cabinet members on the new year and said the privatization of Pakistan International Airlines marked significant progress in the government’s commitment to privatize state-owned enterprises.
Prime Minister Muhammad Shehbaz Sharif chairs a meeting of federal ministries on the implementation of economic governance reforms.
(Islamabad: January 1, 2026) pic.twitter.com/OVVB29j16m
– Prime Minister’s Office (@PakPMO) January 1, 2026
The Prime Minister stressed that the privatization of state-owned enterprises was part of the government’s broader economic reform vision. He noted that the country’s GDP showed significant growth in the first quarter of the current fiscal year, describing it as encouraging.
The cabinet approved the findings of the Cabinet Committee on Legislative Affairs in its December 30 decision, which included actions on the Islamabad Capital Territory Local Government (Amendment) Ordinance.
The amendment bill, which received the assent of President Asif Ali Zardari on Friday morning, revises the framework for compensation for acquired property. Under the amendment, compensation will not be limited to cash payments and may also be provided in the form of land or other prescribed arrangements. In the event of late payment, a supplement of 8% per year will be due.
Read: President Zardari approves CDA Amendment Bill 2025
The legislation also introduces provisions relating to persons with disabilities, minors and persons subject to legal constraints, as well as clauses aimed at safeguarding the rights of landowners.
The cabinet approved the decisions of the Economic Coordination Committee (ECC) on August 26, which included measures to provide relief to electricity consumers under the off-grid tax (captive power plants) and develop a strategy for its implementation.
On the recommendation of the Petroleum Division, the cabinet also approved the adoption of a presidential order to amend the Off-Grid Off-Grid Offtake (Captive Power Plants) Act, 2025, allowing the sale of gas to third parties to off-grid captive power plants.
Prime Minister Shehbaz also spoke about his recent meeting with UAE President Sheikh Mohamed bin Zayed Al Nahyan, which he described as productive in terms of bilateral cooperation and mutual consultation.
Learn more: PM Shehbaz meets UAE President at RYK
The Prime Minister met with the President of the UAE and Ruler of Abu Dhabi at Sheikh Zayed Palace in Rahim Yar Khan on Tuesday afternoon to discuss issues of common interest. The leaders continued discussions since their recent meeting in Islamabad on December 26, when Sheikh Mohamed made his first official visit to Pakistan as UAE President. The two leaders discussed ways to strengthen cooperation in areas such as information technology, energy, mines and minerals, and defense.
Shehbaz also highlighted a telephone conversation with Saudi Crown Prince and Prime Minister Mohammed bin Salman, noting discussions on strengthening economic and strategic ties between the two countries.
