ISLAMABAD: Pakistan’s state-owned enterprises (SOEs) have incurred a staggering Rs342 billion in losses over the past six months, pushing their cumulative losses and unfunded pension liabilities to an alarming Rs7.5 trillion.
This amount is nearly triple the country’s defense budget and more than seven times the Public Sector Development Programme for the fiscal year 2025-26.
The Cabinet Committee on State-Owned Enterprises (CCoSOEs) was informed that the total losses of SOEs have now exceeded Rs5.8 trillion, representing nearly one-third of the recently passed Rs17.5 trillion federal budget for 2025-26.
Despite repeated increases in electricity and gas tariffs over the past three years, circular debt in the oil, gas, and power sectors has surged to over Rs4.9 trillion, severely affecting cash flows and asset valuations.
The government has provided fiscal support to SOEs exceeding Rs600 billion in just six months, equivalent to nearly 10% of total revenue receipts.
Unfunded pension liabilities in power distribution companies (Discos) and other SOEs, estimated at Rs1.7 trillion, remain off the government’s books, as do the pension obligations of Pakistan Railways.
Government guarantees currently stand at Rs2.2 trillion, while costs related to debt rollovers and financial restructuring further tighten fiscal space.
The meeting was informed of persistent governance issues, particularly weak transparency in beneficial interest disclosures under IFRS Section 30, and other regulatory compliance gaps.
A lack of strategic alignment and operational inefficiencies were identified as urgent areas for reform.
Finance Minister Muhammad Aurangzeb emphasized the need for urgent reform in the power and energy sectors, where circular debt has crossed Rs4.9 trillion, and reaffirmed the government’s commitment to enhancing transparency, financial discipline, and accountability across SOEs.
He vowed to push through governance and operational reforms to ensure the financial sustainability of public sector entities.
