Pakistan’s State Owned Enterprises Bleed Billions Despite Strong Revenues

Pakistan’s State-Owned Enterprises (SOEs) posted a sharp deterioration in financial performance in FY2024-25, recording net losses of Rs. 122.9 billion over 300 percent higher than last year despite generating more than Rs. 12 trillion in aggregate revenue. The alarming figures were disclosed at a high-level Cabinet Committee meeting, underscoring persistent structural weaknesses across key public-sector entities.

The Cabinet Committee on SOEs (CCoSOEs), chaired by Finance Minister Muhammad Aurangzeb, reviewed the Annual Consolidated Performance Report prepared by the Central Monitoring Unit (CMU) of the Finance Division. According to the report, SOEs earned around Rs. 12.4 trillion in revenue during FY25, but overall losses widened significantly, rising from Rs. 30.6 billion in FY24 to Rs. 122.9 billion.

Aggregate profits of profitable SOEs fell 13 percent to Rs. 709.9 billion, mainly due to reduced earnings in the oil sector amid lower global oil prices. While losses of loss-making entities declined marginally to Rs. 832.8 billion, the sector as a whole still slipped deeper into the red.

Officials informed the committee that losses remain concentrated in a handful of entities, particularly in transport and power distribution. The National Highway Authority (NHA) and several power distribution companies continued to weigh heavily on the balance sheet, reflecting chronic inefficiencies, high financing costs, and public service obligations that are not commercially viable.

Government support to SOEs increased to Rs. 2.08 trillion during FY25, largely due to equity injections aimed at clearing circular debt. At the same time, inflows from SOEs to the national exchequer rose to Rs. 2.12 trillion through dividends, taxes, and interest income.

The report also highlighted growing fiscal risks, with total SOE debt climbing to Rs. 9.57 trillion. Unfunded pension liabilities were estimated at around Rs. 2 trillion, while guarantees and other off-balance-sheet commitments stood at Rs. 2.16 trillion.

Commending the CMU’s work, the finance minister noted improvements in transparency and IFRS-aligned reporting, calling the consolidated data a “credible foundation for informed policy action.”

Committee members stressed strict enforcement of audits under the SOEs Act, 2023, realistic business planning, and hard budget constraints for chronically loss-making entities.

The committee approved the report’s publication and directed ministries to accelerate governance reforms, debt rationalization, and loss-reduction strategies. It also cleared the appointment of independent directors in several power sector companies, signaling renewed focus on accountability and oversight.