New year’s first meeting also okays off-grid gas sales, captive power levy changes
Prime Minister Shehbaz Sharif chairing a federal cabinet meeting on January 1 Photo: Prime Ministers Office
A new local government system will be introduced in Islamabad following the federal cabinet’s endorsement of decisions taken by the Cabinet Committee on Legislative Cases (CCLC), including actions 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 stated that the privatisation of Pakistan International Airlines marked significant progress in the government’s commitment to privatise state-owned enterprises.
Prime Minister Muhammad Shehbaz Sharif presiding over a meeting of the Federal Ministries on implementation of Economic Governance Reforms.
(Islamabad: 01 January, 2026) pic.twitter.com/OVVB29j16m
— Prime Minister’s Office (@PakPMO) January 1, 2026
The prime minister highlighted that the privatisation of state-owned enterprises is 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 endorsed conclusions made by the Cabinet Committee on Legislative Cases in its December 30 decision, which included actions relating to the Islamabad Capital Territory Local Government (Amendment) Ordinance.
The amendment bill, which received President Asif Ali Zardari’s assent on Friday morning, revises the framework for compensation on acquired property. Under the amendment, compensation will not be restricted to cash payments and may also be provided in the form of land or other prescribed arrangements. In cases of delayed payment, an additional 8% per annum will be payable.
Read: President Zardari approves CDA Amendment Bill 2025
The legislation also introduces provisions relating to persons with disabilities, minors, and individuals under legal constraints, along with clauses aimed at safeguarding the rights of landowners.
The cabinet approved Economic Coordination Committee (ECC) decisions from August 26, which included measures to provide relief to electricity consumers under the Off-Grid (Captive Power Plant) Levy and to develop a strategy for its implementation.
On the recommendation of the Petroleum Division, the cabinet also approved action for the issuance of a presidential order to amend the Off-Grid (Captive Power Plants) Levy Act 2025, allowing third-party sale of gas to off-grid captive power plants.
PM Shehbaz also spoke about his recent meeting with United Arab Emirates President Sheikh Mohamed bin Zayed Al Nahyan, which he described as productive in terms of bilateral cooperation and mutual consultation.
Read more: PM Shehbaz meets UAE president in RYK
The prime minister met the UAE president and ruler of Abu Dhabi at Sheikh Zayed Palace in Rahim Yar Khan on Tuesday afternoon to discuss matters of mutual interest. The leaders continued discussions from their recent meeting in Islamabad on December 26, when Sheikh Mohamed paid his first official visit to Pakistan as UAE president. The two leaders discussed ways to enhance cooperation in areas including information technology, energy, mining and minerals, as well as defence.
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.
