ISLAMABAD – Pakistan’s state-owned enterprises (SOEs) continue to bleed financially, with total accumulated losses and unfunded pension liabilities now crossing Rs7.5 trillion. This amount is nearly three times the defence budget and over seven times the national development budget for the current fiscal year.
The Ministry of Finance revealed these alarming figures during a meeting of the Cabinet Committee on State-Owned Enterprises (CCoSOEs), chaired by Finance Minister Muhammad Aurangzeb. The Finance Division’s report showed that SOEs suffered losses of Rs342 billion in just six months from July to December 2024, adding to their already staggering total loss of Rs5.8 trillion.
Despite multiple hikes in electricity and gas tariffs over the past three years, circular debt in the oil, gas, and power sectors has reached Rs4.9 trillion. This mounting debt is draining the government’s fiscal resources, hurting SOE asset values, and damaging overall economic confidence.
In just six months, the government extended more than Rs600 billion in support to SOEs through subsidies, grants, and loans. Meanwhile, unfunded pension liabilities — especially in power distribution companies and Pakistan Railways — have risen to Rs1.7 trillion, further burdening public finances. Government guarantees have also surged to Rs2.2 trillion.
Finance Minister Aurangzeb criticised delays in energy infrastructure upgrades, poor management in power companies, and weak oversight. He stressed the urgent need for reforms in the energy sector and directed all SOE board members, including senior finance officials, to actively address performance gaps.
The committee approved several high-level appointments, including new chairpersons for QESCO and GEPCO, and board members for GENCO Holding, ISMO, MEPCO, PITC, and EIDMC. It also endorsed the Ministry of Railways’ proposal to dissolve three subsidiaries — RAILCOP, PRACS, and PRFTC — as part of restructuring efforts.