New Delhi: Pakistan’s state-owned enterprises suffered an unprecedented loss of more than 300 per cent in their last fiscal year, which is July 2024 to June 2025. This was revealed in a report by the country’s finance ministry on Friday.
State-owned enterprises (SOEs) span from energy, transport, finance to the services sector. Among them, power companies suffered the maximum losses.
According to the finance ministry report, in 2025, SOEs incurred a net loss of PKR 122 billion, which is four times more than the PKR 30 billion losses incurred in the previous financial year. The ministry, however, cited the falling prices of oil as a major reason behind lack of profits.
“How successful this government has been, in its self-proclaimed efforts to reform the SOEs, can be gauged by the massive 300 per cent increase in SOE losses. The solution, privatisation, is staring them in the face. But the government neither has the mental bandwidth nor the inclination to do so. So it will keep wasting time and racking up losses,” Miftah Ismail, former Finance Minister of Pakistan, told ThePrint.
“This is a horrific structural failure that continues to drain public resources and undermine economic stability,” The Express Tribune wrote in its editorial, titled Bleeding SOEs.
“What remains missing is political will. As long as SOEs are treated as instruments of patronage or employment buffers, meaningful reform will remain out of reach. Continuing to pour trillions into the same leaky vessels is nothing but willful disregard for the public purse,” the editorial noted.
The report was made public at a meeting of the Cabinet Committee on State-Owned Enterprises (CCoSOEs), held under Finance Minister Muhammad Aurangzeb.
The Cabinet Committee was presented with the Annual Consolidated Performance Report of Commercial and Non-Commercial State-Owned Enterprises (SOEs) for FY2024-25, prepared by the Central Monitoring Unit (CMU) of the Finance Division, according to a The Express Tribune report.
The Committee was informed that during FY 2024-25, aggregate revenues of SOEs stood at PKR 12.4 trillion which is a reduction of PKR 1.4 trillion, or over 10 per cent, compared to the previous year. Aggregate profits of profit-making SOEs also declined by 13 per cent to PKR 710 billion, compared to PKR 821 billion last year, it added.
Profit and loss
The main profit-generating SOEs in Pakistan are the oil, gas, power generation, finance, and strategic service sectors. Leading among them are Oil & Gas Development Company (OGDCL) and Pakistan Petroleum Limited (PPL), with profits of approx PKR 82–85 billion and PKR 50 billion, respectively.
In 2024, OGDCL led profits with PKR 123.3 billion. Then financial institutions like the National Bank of Pakistan (NBP) and the State Life Insurance Corporation (SLIC) remained profitable due to steady interest income and premiums.
Additionally, strategic service entities like Pakistan Revenue Automation Limited (PRAL) and Pakistan Single Window (PSW) also generate fair revenues.
Meanwhile, the loss-making entities include power distribution companies (DISCOs), Pakistan International Airlines (PIA), Pakistan Railways, the National Highway Authority (NHA), and Pakistan Steel Mills.
Despite being a loss-making entity, Pakistan Railways, with an annual deficit of PKR 55 billion, is now planning a $62 billion corridor under the CPEC 2.0 announced in 2024.
In 2024, the Pakistan govt kept the Pakistan Revenue Automation Limited (PRAL) and Pakistan Single Window (PSW) as essential entities aimed at retaining them in the public sector.
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A debt loop
To help the SOE’s stay afloat, during FY 2024–25, the government had to pump PKR 2.1 trillion of taxpayer money into the enterprises. Most of this wasn’t fresh spending on services, but equity injections, which is money given to shore up these companies’ balance sheets and mainly to pay off “circular debt” — where power companies, fuel suppliers, and the government owe money to each other.
At the same time, direct subsidies actually went down slightly, meaning the support shifted from subsidies to capital bailouts.
Essentially, the government is still heavily propping up loss-making SOEs, but is doing it more through capital infusions to plug old debt rather than ongoing subsidies.
Moreover, this decline came during the first full fiscal year of Prime Minister Shehbaz Sharif’s government, despite repeated promises of reform and economic stabilisation.
Pakistan’s privatisation bid
The IMF, World Bank, and Asian Development Bank have long asked Pakistan to privatize state-owned enterprises (SOEs) to raise cash and reduce the fiscal burden of loss-making entities.
In a 2023 Diplomat article, author Samir Tata argued that one potential approach is a debt-to-equity swap, where foreign creditors exchange Pakistan’s sovereign debt for shares in SOEs slated for privatisation. This could lower external debt, attract foreign investment, and reduce government support for SOEs.
Pakistan’s total foreign debt stands at around $134 billion, with $6.12 billion in 2025 and $4.73 billion in 2024 in the private sector and $29-$33 million in the public sector. In a swap, these creditors could receive equity in companies such as Pakistan International Airlines (PIA) or State Life Insurance Corporation, either through full control transfers or partial stake sales via the stock exchange.
But that is not enough. “The IMF would like to see rationalisation, and has encouraged legislation toward improving governance of the SOEs. While doing so may help, in many cases the debt structure and underlying business may make it difficult to make some of the SOEs profitable,” Pakistani economist Javed Hassan told ThePrint.
In its biannual performance report for July–December FY25, the Ministry’s Central Monitoring Unit (CMU) identified the power sector as the biggest drag on state-owned enterprises (SOEs), with accumulated losses reaching PKR 5.9 trillion. The sector alone accounts for PKR 2.4 trillion of the PKR 4.9 trillion circular debt across all SOEs.
The National Highway Authority (NHA) reported the highest net loss of PKR 153.3 billion, bringing its total deficit to PKR 1.953 trillion. Quetta Electric Supply Company (QESCO) and Sukkur Electric Power Company (SEPCO) saw six-month losses of PKR 58.1 billion and PKR 29.6 billion, with cumulative losses of PKR 770.6 billion and PKR 473 billion, respectively in this fiscal year.
(Edited by Aamaan Alam Khan)