Bleeding dry

State-owned enterprises (SOEs) in Pakistan continue to be a major liability, draining the national exchequer with mounting losses and debts that have reached staggering levels. According to the Ministry of Finance's latest report, SOEs recorded a collective loss of Rs851 billion in FY24, with total loans ballooning to Rs9.2 trillion - a sum nearly equivalent to the FBR total collections. These numbers are indicative of the dire financial and credit risks that these entities pose to the economy, making the government's failure to reform them an increasingly costly oversight. The National Highway Authority alone reported a colossal loss of Rs295.5 billion, making it the highest loss-making SOE. Despite persistently increasing toll rates, the NHA has done little to address its financial inefficiencies, leaving taxpayers to bear the brunt of its mismanagement. Meanwhile, the power sector remains the biggest collective drain, with inefficiencies and circular debt eroding economic value. The overall Economic Value Added (EVA) of SOEs stands at negative Rs2.5 trillion, signalling that these entities are not just loss-making but actively diminishing national wealth. The incumbent government took office promising macroeconomic stability through structured reforms, including the privatisation of chronically loss-making SOEs. However, despite its commitments - largely dictated by the IMF bailout programme - little has materialised. Attempts to sell PIA yielded little progress, with potential buyers hesitant due to its staggering liabilities and operational inefficiencies. Similarly, other bleeding SOEs remain under state control, continuing to erode public finances. Instead of letting these entities continue to haemorrhage public funds, the government must aggressively pursue buyers, offer incentives and push through privatisation without delay. It is time to move beyond rhetoric and take concrete steps to divest the failing enterprises.

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