ISLAMABAD – Pakistan’s state-owned enterprises (SOEs) are losing nearly Rs1.9 billion every day, with total accumulated losses now reaching Rs5.8 trillion, sparking alarm within the federal government.
In a recent meeting of the Cabinet Committee on State-Owned Enterprises (CCoSOEs), chaired by Finance Minister Muhammad Aurangzeb, officials presented a bleak report covering July to December 2024. The Central Monitoring Unit revealed that just in these six months, SOEs lost Rs342 billion, adding to the financial strain on the national budget.
Meanwhile, circular debt in the oil, gas, and power sectors has crossed Rs4.9 trillion, severely affecting cash flow and the financial stability of energy-related SOEs. The government also spent over Rs600 billion in subsidies and loans to support these enterprises—nearly 10% of its total revenue in the same period.
Moreover, unfunded pension liabilities of Rs1.7 trillion in power distribution companies and Pakistan Railways were flagged as a hidden fiscal burden, with Rs2.2 trillion in government guarantees adding further pressure. The committee also raised concerns over governance gaps, weak financial reporting, and poor operational strategies.
Finance Minister Aurangzeb urged government-appointed directors on SOE boards to play a more active role and ensure reforms align with national development goals. He stressed the need for stronger oversight, cost control, and strategic planning to fix long-standing inefficiencies.
The committee approved several major administrative changes, including new board appointments for QESCO, GEPCO, MEPCO, PITC, ISMO, and GHCL. It also greenlit the closure of three loss-making subsidiaries of Pakistan Railways: RAILCOP, PRACS, and PRFTC, as part of efforts to streamline operations and cut losses.
Aurangzeb concluded the meeting by highlighting the urgent need to align SOE reforms with broader economic recovery plans. He called for a coordinated and time-bound approach to stop the financial bleeding and restore investor confidence in public sector management.