ISLAMABAD:Pakistan’s circular debt in the oil, gas, and power sectors has reached Rs 4.9 trillion, while cumulative losses of State-Owned Enterprises (SOEs) stood at Rs 5.8 trillion as of December 2024, including Rs 342 billion losses incurred during the July–December 2024 period.
These alarming figures were revealed during a meeting of the Cabinet Committee on State-Owned Enterprises (CCoSOEs), chaired by Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb.
The Finance Minister, along with Power Minister Sardar Awais Ahmed Khan Leghari, Maritime Affairs Minister Muhammad Junaid Anwar Chaudhry, Science and Technology Minister Khalid Hussain Magsi, and senior officials from relevant ministries, reviewed a biannual performance report on federal SOEs prepared by the Central Monitoring Unit of the Finance Division. The report covered the period from July to December 2024, and showed that SOEs incurred Rs 342 billion in losses over six months alone—equivalent to Rs 1.9 billion in daily losses.
The Committee was told that the circular debt in the oil, gas, and power sectors had crossed Rs 4.9 trillion, severely affecting cash flows and asset valuations. The government’s fiscal support to SOEs—through grants, subsidies, loans, and other injections—had also exceeded Rs 600 billion in six months, equivalent to nearly 10% of total revenue receipts. In addition, unfunded pension liabilities in DISCOs and other SOEs, estimated at Rs 1.7 trillion, remain off the books, as do railways’ pension obligations, the meeting was told.
The meeting also noted that government guarantees for SOEs now stand at Rs 2.2 trillion, while rollover costs and liabilities from financial restructuring continue to compound fiscal pressures.
Finance Minister Aurangzeb expressed deep concern over these financial strains and reaffirmed the government’s commitment to reforming public sector entities. He stressed the importance of aligning SOEs’ business plans with national priorities and improving operational efficiency, particularly in the power sector. He cited inefficiencies in DISCO operations, delays in NTDC network upgrades, and poor financial reporting standards as major impediments to progress.
The committee highlighted persistent governance issues, including low transparency in beneficial ownership disclosures under IFRS Section 30 and overall non-compliance with performance benchmarks. The Finance Minister emphasized that government-appointed directors on SOE boards must exercise due diligence and play an active role in safeguarding the financial health and operational performance of their respective entities.
During the meeting, several board-level appointments in the power sector were discussed and approved. These included the appointment of a Chairman for the Quetta Electric Supply Company (QESCO), formation of the Board of Independent System Market Operator (ISMO), and independent directors for GEPCO, GENCO Holding Company Limited, MEPCO, Power Information Technology Company (PITC), and the Energy Infrastructure Development and Management Company (EIDMC).
In a separate development, the Cabinet Committee on State-Owned Enterprises (CCoSOEs) also approved a summary from the Ministry of Railways for the winding up of three railway companies—RAILCOP, PRACS, and PRFTC—as part of the broader restructuring plan for state-owned entities.
