ISLAMABAD: The loss-making state-owned enterprises (SOEs) incurred a combined loss of Rs343 billion during the first half of fiscal year 2025, bringing the total accumulated losses of these loss-making entities to Rs5.893 trillion—a stark indicator of deep-rooted financial inefficiencies and the urgent need for turnaround strategies.
Finance Division released bi-annual report on SOEs fiscal year 2025 (July 2024 to December 2024), which noted that National Highways Authority (NHA) recorded the largest loss of Rs153.3 billion, pushing its accumulated losses to Rs1,953.4 billion—a reflection of the unsustainable toll revenue model against massive road infrastructure expansion.
Quetta Electric Supply Company (Qesco) and Sukkur Electric Power Company (Sepco) followed with losses of Rs58.1 billion and Rs29.6 billion, respectively, with accumulated losses of Rs770.6 billion and Rs473.0 billion, underscoring chronic inefficiencies and poor recoveries in the distribution segment.
State-Owned Enterprises: CCoSOEs concerned over staggering losses
Other notable contributors to the fiscal drain included Pakistan Railways (Rs26.5 billion loss, accumulated losses Rs6.7 billion), Peshawar Electric Supply Company (Pesco) with Rs19.7 billion loss (Rs684.9 billion accumulated), and Pakistan Steel Mills (PSM) reporting Rs15.6 billion in losses, raising its accumulated shortfall to Rs255.8 billion.
Additionally, Pakistan Telecommunication Company Limited (PTCL) posted Rs7.2 billion in losses (accumulated: Rs43.6 billion), Pakistan Post Rs6.3 billion (Rs93.1 billion accumulated), and Utility Stores Corporation (USC) Rs4.1 billion (Rs15.5 billion accumulated), revealing persistent operational and structural issues.
Among power generation entities, the GENCOs (I-IV) together posted over Rs8.3 billion in combined losses: GENCO-II (Guddu) at Rs3.8 billion, GENCO-III (Muzaffargarh) at Rs3.1 billion, and GENCO-I (Jamshoro) at Rs1.3 billion. Neelum Jhelum Hydro Power Company posted Rs2.3 billion in losses (accumulated: PKR 58.2 billion).
Collectively, “All Other” loss-making SOEs added Rs2.7 billion to the burden, with their cumulative losses totaling Rs1,285.96 billion, bringing the total accumulated losses of these 15+ entities to Rs5,893.2 billion—a stark indicator of deep-rooted financial inefficiencies and the urgent need for turnaround strategies.
The financial performance of Pakistan’s power distribution companies (DISCOs) over the six-month period reveals a deeply concerning trend of escalating losses, significantly amplified once government subsidies are adjusted out of revenues.
The total core operating actual loss for the period stands at Rs283.7 billion, with notable contributors including Qesco Limited (Rs92.65 billion loss), Pesco Limited (Rs53.68 billion), and Hyderabad Electric Supply Company (Hesco) Limited (Rs39.63 billion).
Even DISCOs with positive EBIT before subsidy removal—such as Multan (EBIT Rs8.4 billion), Faisalabad (Rs52 billion), and Gujranwala (Rs20.9 billion)—turned loss-making after adjusting for subsidies, incurring actual losses of Rs35.17 billion, Rs13.12 billion, and Rs7.32 billion, respectively. Lahore, Islamabad, Sukkur, and Tribal DISCOs also showed EBIT gains or marginal losses but failed to stay profitable post-adjustments. Particularly, alarming is Quetta DISCO, with an EBIT loss of Rs60.36 billion and additional subsidies of Rs 32.30 billion still leaving a staggering net loss.
Compounding these financial losses is the persistent 20 per cent technical and commercial loss of electricity units, pointing to deep-rooted inefficiencies in billing, recovery, and transmission infrastructure. These structural flaws push the 6-month average sectoral loss close to Rs300 billion, which extrapolates to Rs600 billion annually, underscoring an urgent imperative for transformational reforms.
Without rapid overhaul—targeting governance, technology, privatization or concession models, and tariff realignment—the fiscal haemorrhaging will not only burden the national exchequer but also paralyze broader energy sector recovery and investment.
Copyright Business Recorder, 2025
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