State-Owned Enterprises (SOEs) in Pakistan are facing a financial crisis that’s hard to ignore: a staggering 300% surge in net losses for FY25, totaling Rs832 billion across 25 entities. But here’s where it gets even more alarming—the net losses skyrocketed from Rs30.6 billion in FY24 to Rs123 billion in FY25, raising serious questions about the sustainability of these enterprises. And this is the part most people miss: while a handful of SOEs are raking in massive profits, the majority are drowning in debt, creating a financial imbalance that’s becoming increasingly difficult to manage.
The National Highway Authority (NHA) topped the list of loss-makers with a jaw-dropping Rs294.9 billion, closely followed by Quetta Electric Supply Company (Qesco) at Rs112.7 billion. Other major culprits include Peshawar Electric Supply Company (Pesco) with Rs92.7 billion, Pakistan Railways at Rs60.3 billion, and PIA Holding Company Limited at Rs48.9 billion. Is this a sign of systemic inefficiency, or are external factors like rising operational costs and outdated infrastructure to blame?
The finance ministry’s report doesn’t stop there. It highlights other significant loss-makers like the National Power Parks Management Company (Rs46.1 billion), Neelum-Jhelum Hydropower Company (Rs29.4 billion), and Pakistan Steel Mills (Rs26 billion). Even smaller entities like the National Insurance Company (Rs2.9 billion) and Pakistan Broadcasting Corporation (Rs0.03 billion) are feeling the pinch. Could this widespread financial hemorrhage be a wake-up call for urgent reforms?
On the flip side, a few SOEs are thriving, posting an aggregate profit of Rs709 billion in FY25. Leading the pack is the Oil and Gas Development Company Limited with Rs169.9 billion, followed by Pakistan Petroleum Limited (Rs89.9 billion) and the National Bank of Pakistan (Rs56.7 billion). These profit powerhouses account for nearly 90% of total SOE profits, underscoring a stark earnings disparity. But is this concentration of wealth sustainable, or is it masking deeper structural issues?
Diving into the balance sheet, total equity grew by 7%, reaching Rs6,245.7 billion, thanks to recapitalization efforts, particularly in the power sector to tackle circular debt. Liabilities, however, saw a modest 3% decline, dropping to Rs31,742.4 billion. Total assets remained relatively stable, with a marginal 1% decrease to Rs37,988.1 billion. Is this stability a silver lining, or merely a temporary reprieve?
Government fiscal support to SOEs surged by 37%, hitting Rs2,078.5 billion in FY25. Equity injections saw the most dramatic increase, jumping to Rs728.9 billion, primarily to clear power sector circular debt. Loans to SOEs also rose by 34%, reaching Rs354.1 billion, while grants and subsidies took a hit, declining by 27% and 7%, respectively. Are these financial injections a band-aid solution, or a strategic move toward long-term viability?
Here’s a thought-provoking question for you: With nearly 16% of tax revenue (Rs2,078 billion out of Rs12,970 billion) being funneled back into SOEs, are taxpayers getting their money’s worth, or is this a bottomless pit? Share your thoughts in the comments—let’s spark a debate on the future of Pakistan’s SOEs.
