ISLAMABAD: The loss-making state-owned enterprises (SOEs) posted aggregate losses of Rs342.8 billion during the first half (July-December) of fiscal year 2025-26, while the government extended Rs804 billion in support to SOEs, highlighting the continued heavy fiscal burden of underperforming public entities.
This was revealed during a meeting of the Cabinet Committee on State-Owned Enterprises (CCoSOEs), which was held under the chairmanship of Federal Minister for Finance and Revenue Muhammad Aurangzeb.
The meeting was also attended by Federal Minister for Maritime Affairs Muhammad Junaid Anwar Chaudhry.
The Committee reviewed the Bi-Annual Performance of Federal State-Owned Enterprises for the first half of fiscal year 2025-26, as part of the Government’s continued efforts to strengthen transparency, accountability and performance across the federal SOE portfolio.
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The Central Monitoring Unit (CMU) of the Finance Division presented a detailed assessment covering financial and operational performance, profitability and losses, fiscal flows, implementation of approved business plans, governance, financial reporting and progress against key performance targets.
The Committee was informed that profitable SOEs generated aggregate profits of Rs423.3 billion during July-December 2025, while aggregate losses of loss-making SOEs stood at Rs342.8 billion. The performance reflected significant value being generated across several parts of the SOE portfolio, while also underscoring the need for continued corrective action and structural reforms in underperforming entities.
The Committee was informed that Government support to SOEs amounted to Rs804 billion, while SOE contributions to the Government stood at Rs839 billion, resulting in a positive net fiscal flow of Rs35 billion in favour of the Government during the period. The Committee noted that improving commercial performance, strengthening financial discipline and progressively reducing dependence on public support remain central objectives of the Government’s SOE reform agenda.
The review also identified areas requiring sustained attention, including circular debt and other fiscal risks, operational weaknesses in parts of the power and infrastructure sectors, corporate governance gaps and the need for stronger board effectiveness and accountability. The Committee emphasized continued implementation of approved business plans, measurable performance targets, improved operational efficiency and timely corrective action in underperforming entities.
As part of the Government’s emphasis on greater transparency and data-driven governance, the Committee was also given a demonstration of the CMU’s integrated digital reporting and analytics platform for SOEs. The platform centralizes SOE data and enables standardized reporting, digital dashboards and deeper financial and operational analytics, strengthening the Government’s ability to monitor performance, identify emerging risks and assess entities against agreed targets.
The Committee welcomed the progress in strengthening the SOE monitoring and reporting framework and emphasized that greater transparency must be accompanied by stronger performance and accountability. It directed continued focus on financial discipline, governance, operational efficiency and effective implementation of approved business plans across the SOE portfolio.
The Committee reiterated that the Government’s objective is to develop an SOE portfolio that is more transparent, professionally governed, financially disciplined and increasingly commercially sustainable, while systematically addressing fiscal risks and reducing the burden of persistently underperforming entities on public finances.
The Committee further approved a summary submitted by the Cabinet Division regarding the appointment of Independent Directors against vacant positions on the Board of Printing Corporation of Pakistan (PCP).
The Committee also considered and approved a summary submitted by the Science & Technology Division regarding the appointment of Chairman of the Board of Directors of Indigenous Research and Development Agency (IRADA), in accordance with the State-Owned Enterprises Policy, 2023.
The Committee considered a summary submitted by the Petroleum Division regarding the constitution of the Board of Management of Pakistan State Oil Company Limited (PSO). The Committee approved the proposed nominations of Independent Directors in accordance with the State-Owned Enterprises (Ownership and Management) Policy, 2023.
The Committee also considered a summary submitted by the Finance Division regarding an amendment to the SOEs Policy, 2023, for the monitoring mechanism of IFRS implementation by SOEs.
The Committee approved the proposed amendment to provide that IFRS applicable to SOEs shall mean the Financial Reporting Standards notified by SECP, including any modifications or exemptions granted by SECP to companies in general. The amendment also provides that, in the case of SOEs regulated by the State Bank of Pakistan, the statutory financial reporting framework prescribed by SBP shall prevail.
The Committee also discussed matters relating to SOE reforms submitted by the Finance Division, including measures to strengthen the process for selection and appointment of directors, address delays in board appointments, and ensure greater alignment of candidates’ experience and skills with the requirements of respective SOEs.
The Committee also discussed enhancing the pool of qualified candidates and strengthening capacity-building and vetting mechanisms for directors.
Copyright Business Recorder, 2026
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