Budget Bill Targets Surpluses from Public Bodies and State-Owned Firms

TDT | Manama

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Half the state’s net profits from Mumtalakat and Bapco Energies would be routed into the general budget under a merged bill Parliament will debate in its next sitting.  

The Financial and Economic Affairs Committee has also rewritten the wider plan so the budget would take the year-end surpluses of all public authorities and public institutions, while keeping the 50 per cent floor for the two state-owned groups, after the statutory reserve is set aside. The government has objected, saying the current legal set-up already covers profit transfers and oversight, and warning that fixed rules could limit cash used for reinvestment and debt duties.

The plan began as two separate draft laws, one to amend Article 10 of Decree-Law No. 39 of 2002 on the state budget and another to set a minimum transfer from the two state groups. The committee merged them into one report under Parliament’s rule for measures that deal with the same subject, treating the earlier text as the main bill and the later one as an amendment.  

In the merged redraft, the committee moved away from pulling in all revenues and instead focused on surpluses left at year end for public bodies. It kept, in the same article, the rule that no less than 50 per cent of the state’s net profits from Mumtalakat and Bapco Energies should be included in the general budget, after the statutory reserve.  

The bill also keeps a reporting duty for the two companies’ accounts. Under the committee text, the government would submit the prior year’s financial statements, audited by the National Audit Office, to Parliament within five months of the annual accounts being closed, with approval then issued by both chambers and published in the Official Gazette.  

The government, in written replies, urged MPs to think again. It argued that existing law already requires ministries and government bodies to pay collected funds into the general account, and that transfers from state-owned firms are already built into the budget through revenue estimates and shareholder decisions.  

It also warned that forcing wide transfers could leave the budget exposed to costs, losses, or debts linked to those bodies and firms, and that rigid payout rules may clash with cash needs, loan terms, and plans for future spending by the companies.

If the draft becomes law, the committee proposes it should start from the first day of the next financial year after publication in the Official Gazette, rather than the day after publication.