Finance minister defends SOEs performance report, blames media for misinterpretation

In a recorded video message, Finance Minister Muhammad Aurangzeb defended the government’s handling of State-Owned Enterprises (SOEs), following media reports revealing a sharp decline in net cash returns and a 301% increase in net losses for these entities. 

The minister criticised the media for what he described as "selective reporting" and "misinterpretation" of the facts presented in the report, stressing that the data was not fully understood.

The finance ministry’s report disclosed that net cash returns from SOEs dropped by 91%, from Rs458.2 billion in FY24 to Rs40.7 billion in FY25. Additionally, the overall net loss for SOEs surged to Rs122.9 billion, a 301% increase from the previous year. Despite these figures, Aurangzeb pointed to a reduction of Rs74 billion in the total SOE losses over the past three years, noting that losses had fallen by Rs823 each day over that period.

Aurangzeb acknowledged the struggles faced by certain sectors, especially oil and gas, which saw reduced profitability due to global price drops. He admitted that these financial difficulties, compounded by issues like subsidies, theft, and corruption, remain a challenge. However, he emphasized the long-term improvement in SOE performance and reiterated the government’s commitment to addressing these challenges through reforms.

One of the major issues highlighted in the report was the lack of robust business plans from many SOEs. Aurangzeb revealed that while business plans were submitted to the government, they were often overly optimistic and not backed by thorough analysis. He said that the government had asked for more detailed, well-researched business plans and is currently reviewing them through the central monitoring unit.

Regarding the government’s efforts to privatize underperforming SOEs, Aurangzeb updated the public on the progress of the privatization of key entities. The sale of Pakistan International Airlines (PIA) is on track for completion, with control expected to be transferred to the private sector by April 2026. Similarly, the process for the privatization of Zarai Taraqiati Bank Limited (ZTBL) is nearing its final stages and will soon be presented to the Cabinet Committee on Privatisation.

Additionally, the minister confirmed that steps are being taken to privatize power distribution companies, with financial advisors already appointed for the sale process. Aurangzeb stressed that privatization would continue under the guidance of the Prime Minister, with a focus on ensuring transparency and efficiency in the process.

While acknowledging the ongoing fiscal challenges, the finance minister assured that the government would continue its efforts to streamline the public sector and improve governance. He also emphasized the importance of these reforms in creating a sustainable fiscal future and driving overall economic growth in the country.