Pakistan Railways posts over Rs61 billion net loss in FY25, AGP report says

Pakistan Railways posted a net loss of more than Rs61 billion in FY2024-25, up by Rs9 billion or 19.11% from the previous year, as it continued to face financial sustainability pressures due to the gap between revenue and expenditure, with its operating loss reaching Rs60 billion and operating loss ratio standing at 65%, according to the Auditor General of Pakistan’s latest report.

Pakistan Railways recorded gross earnings of Rs92.7 billion against total working expenses of nearly Rs153 billion during the year. Over the five years from FY2020-21 to FY2024-25, working expenses rose by 60%, while operational losses increased by 29%.

The audit covered 84 out of 160 formations of Pakistan Railways, including audited expenditure of Rs105.6 billion and audited receipts of Rs84.25 billion.

The AGP raised audit observations of Rs34.42 billion against Pakistan Railways and its subsidiaries. These included Rs24.6 billion in budgetary irregularities, Rs11.2 billion in weak financial management, Rs7.2 billion in project management lapses and Rs11.5 billion in non-budgetary irregularities related to land, assets and inventory.

Under Revenue Grant No. 85, Pakistan Railways spent Rs154,212.26 million against a final allocation of Rs157,839.40 million, leaving savings of Rs3,627.14 million, or 2.30%. Although the savings were within the permissible 5% limit, the audit said the administration failed to utilise available funds despite outstanding interest liabilities on foreign loans.

Under Capital Grant No. 133, Pakistan Railways used Rs30,585.30 million against a final grant of Rs34,799.00 million, leaving Rs4,213.70 million, or 12.11%, unutilised. The AGP linked this to weak budgetary controls and criticised management for not using funds meant for capital infrastructure development.

The report said Pakistan Railways’ total assets stood at Rs515,329.57 million in FY2024-25. However, revenue reserves remained unchanged at Rs26.05 billion for the second consecutive year, indicating no retained earnings.

Current liabilities rose by 46.41% to Rs29,280.69 million in FY2024-25 from Rs19,999.31 million in FY2023-24, increasing short-term liquidity pressure.

The AGP also noted that fixed assets grew by 17.26%, outpacing current assets and affecting working capital efficiency. An amount of Rs34.34 billion accrued on account of commutation, GPF and related heads was not charged to the profit and loss account.

The audit also reviewed Pakistan Railways Estate Development Company. Redamco’s total assets fell by 42.34%, from Rs308.396 million in 2024 to Rs177.825 million in 2025.

Despite the decline in assets, Redamco reported net profit after tax of Rs70.677 million in FY2024-25, compared with Rs29.317 million a year earlier, showing an increase of 141.08%.

The audit flagged several issues at Redamco, including unauthorised retention of Pakistan Railways’ share of Rs68.598 million as a payable in its balance sheet as of June 30, 2025.

It also noted that Redamco paid an advance of Rs19.74 million for vehicle purchases despite the Finance Division’s austerity ban issued on September 4, 2024.

The AGP said Redamco’s FY2024-25 accounts were audited by a private chartered firm without required statutory concurrence from the AGP. It also said audited financial accounts of other subsidiaries, including PRACS, RAILCOP and PRFTC, were not provided to the audit team.

The report said Pakistan Railways needs stronger internal controls, better budget governance and a financial recovery plan. It warned that without cost control and proper use of capital development funds, the entity would remain dependent on federal support.

Pakistan Railways received Rs64.03 billion in federal grant-in-aid during FY2024-25.