The Cabinet Committee on State-Owned Enterprises (CCoSOEs) has expressed alarm over the mounting financial losses in Pakistan’s state-owned enterprises (SOEs), which have reached a cumulative Rs5.8 trillion, including Rs342 billion in losses recorded in the second half of 2024 alone — translating into a daily drain of Rs1.9 billion on the national exchequer.
Chaired by Federal Finance Minister Muhammad Aurangzeb, the committee observed that inefficiencies in power distribution companies (DISCOs), slow network expansion by the National Transmission and Despatch Company (NTDC), unfunded pension liabilities, and systemic governance issues continue to erode fiscal space and undermine investor confidence.
A biannual report presented by the Central Monitoring Unit of the Finance Division, covering the period from July to December 2024, painted a grim picture of the SOE landscape. Circular debt in the oil, gas, and power sectors has now surpassed Rs4.9 trillion, significantly hampering cash flows and asset valuations.
The government has extended over Rs600 billion in fiscal support to SOEs in the last six months in the form of subsidies, grants, and loans — equivalent to nearly 10% of total federal revenue receipts for the period. Additional fiscal stress is emerging from unfunded pension liabilities of around Rs1.7 trillion in DISCOs and railway entities, which remain off the formal balance sheets. Meanwhile, outstanding government guarantees have climbed to Rs2.2 trillion.
The committee raised concerns about widespread compliance lapses, particularly low disclosure of beneficial ownership under IFRS Section 30, and a lack of strategic coherence across business plans of public sector entities. Operational inefficiencies, poor cost controls, and governance lapses were flagged as urgent areas requiring structural reform.
Aurangzeb emphasised that directors representing the government on SOE boards must take a more active and informed role in addressing inefficiencies and aligning business strategies with national development priorities. He reaffirmed the government’s resolve to ensure financial discipline, transparency, and improved oversight of SOEs.
Several key administrative decisions were approved during the meeting. These included the appointment of a Chairman to the Board of Quetta Electric Supply Company (QESCO); constitution of the Board of the Independent System Market Operator (ISMO); appointment of Independent Directors and Chairmen to Gujranwala Electric Power Company (GEPCO), GENCO Holding Company Limited (GHCL), Multan Electric Power Company (MEPCO), and the Power Information Technology Company (PITC); and reconstitution of the Board of the Energy Infrastructure Development and Management Company (EIDMC).
Separately, the committee also approved a summary submitted by the Ministry of Railways for the winding up of three underperforming subsidiaries: RAILCOP, PRACS, and PRFTC.
Federal ministers for Power, Maritime Affairs, and Science and Technology — Sardar Awais Ahmed Khan Leghari, Muhammad Junaid Anwar Chaudhry, and Khalid Hussain Magsi, respectively — along with senior officials from relevant ministries, participated in the meeting.
The finance minister concluded by underscoring the urgency of aligning SOE reforms with broader economic recovery efforts and stressed the need for a coordinated, time-bound strategy to address deep-rooted inefficiencies across public sector enterprises.
