Govt earmarks Rs288 billion investment to boost productivity of state-owned enterprises

The federal government has allocated Rs288 billion ($1.02 billion) to enhance the infrastructure and economic productivity of select state-owned enterprises (SOEs), marking a shift from traditional budget allocations. Under this new initiative, SOEs are empowered to fund their own development projects outside the conventional Public Sector Development Programme (PSDP), The News reported.

The plan focuses on sectors crucial for economic growth, including energy, telecommunications, water, and defence production. This move reflects the government’s push for performance-based public investment and fiscal self-reliance.

The Petroleum Division is at the forefront of this initiative, with key entities such as Oil and Gas Development Company Ltd (OGDCL), Sui Northern Gas Pipelines Ltd (SNGPL), Sui Southern Gas Company Ltd (SSGC), Pakistan Mineral Development Corporation (PMDC), and Pak-Arab Refinery Ltd (PARCO) collectively investing Rs109 billion. 

Following closely are the Power Division entities, including National Transmission and Dispatch Company (NTDC) and Power Energy and Power Company (PEPCO), with Rs77 billion earmarked for development. 

Meanwhile, IT and telecom bodies like Pakistan Telecommunication Authority (PTA), National Telecommunications Corporation (NTC), and the Universal Service Fund (USF) are set to invest Rs34.4 billion.

Wapda, under the Water Resources Division, will contribute Rs26 billion towards enhancing water security and climate resilience, while the Pakistan National Shipping Corporation (PNSC) will allocate Rs1.8 billion.

In the 2023-24 fiscal year, SOEs reported losses totaling Rs851 billion and outstanding loans of Rs9.2 trillion, nearly matching the Federal Board of Revenue’s annual tax collection. After factoring in profits from entities under the Pakistan Sovereign Wealth Fund, the net losses amounted to Rs521.5 billion. 

The power sector firms have been the biggest contributors to these losses, with the National Highway Authority reporting a loss of Rs295.5 billion. Despite a 5.26 percent rise in total revenues to Rs13.5 trillion, net losses increased by 89 percent, indicating substantial financial risks.

On a positive note, some SOEs reported significant profits, with OGDCL leading the pack at Rs208 billion, followed by Pakistan Petroleum Ltd at Rs115.4 billion, and National Power Parks at Rs76.8 billion. Other profitable SOEs include Government Holding Pvt Ltd (GHPL), Pak-Arab Refinery Company, and Port Qasim Authority.

Earlier, the Planning Ministry tasked various divisions with compiling their non-PSDP development activities being executed by SOEs. This information will be used to create an investment map aimed at improving transparency, public-private partnerships, and sectoral efficiency.