Pakistan’s state-run enterprises are sinking deeper into financial distress, with fresh figures painting a grim picture of mounting losses and systemic inefficiencies. According to the latest government report, 15 major State-Owned Enterprises (SOEs) have collectively lost nearly Rs5.9 trillion, a surge of Rs345 billion just in the first half of FY2025.
What’s worse, pension liabilities for these SOEs have ballooned to Rs1.7 trillion, while their overall inter-company debt now hovers around Rs4.9 trillion. The circular debt crisis—especially within the power sector—continues to strangle entities like PSO, PPL, GHPL, and OGDCL, severely impairing their financial footing.
The National Highway Authority (NHA) topped the loss chart, recording Rs153 billion in red ink, pushing its total accumulated losses to a staggering Rs1.95 trillion. Power distribution companies followed close behind: Quetta Electric Supply Company (QESCO) lost Rs58 billion, Sukkur Electric Power Company (SEPCO) lost Rs29 billion, and Peshawar Electric Supply Company (PESCO) Rs19 billion—underscoring how deep-rooted the crisis is in Pakistan’s energy distribution network.
Pakistan Railways, despite massive historical funding, posted another Rs6.7 billion in losses. Pakistan Steel Mills added Rs15.6 billion to its long-standing deficit, while Pakistan Post, PTCL, and Utility Stores Corporation continued their losing streaks, largely due to outdated systems, poor management, and weak commercial planning.
Power producers like GENCOs and Neelum Jhelum Hydro also reported negative numbers, dragging the sector down further. Even those companies that appeared profitable on paper—such as FESCO, MEPCO, and GEPCO—ended up in the red after adjusting for subsidies.
The report highlights a worrying 20% technical and commercial loss in electricity transmission and billing inefficiencies, translating into a Rs600 billion annual hemorrhage. Without deep reforms in governance, privatization, and tariff alignment, this financial bleeding is unlikely to stop.
Government guarantees to back SOEs have jumped to Rs2.2 trillion—up from Rs1.4 trillion—adding more pressure to the national balance sheet. Experts now recommend adopting global financial models and risk assessment frameworks to better evaluate and manage this burden.
While a few SOEs like OGDCL, PPL, and NPPMCL did post profits—Rs82.5 billion, Rs49.9 billion, and Rs37.4 billion respectively—their earnings pale in comparison to the sector-wide debt, which has now climbed to Rs8.8 trillion. This includes loans from domestic banks, foreign lenders, and unpaid interest, revealing how deeply the government is entrenched in keeping these entities afloat.
In short, Pakistan’s SOE ecosystem is on the brink, weighed down by a toxic mix of inefficiency, mismanagement, and unchecked borrowing. Without urgent structural reforms, these institutions may soon become too costly to rescue.
