Under pressure from the International Monetary Fund (IMF), Pakistan’s Ministry of Finance has released a performance audit of its state-owned enterprises (SOEs)—and the findings are nothing short of alarming.
The report reveals a mountain of financial mismanagement, escalating liabilities, and record-breaking losses that now exceed Rs5.8 trillion.
In just the first six months of the last fiscal year, losses ballooned by a staggering Rs3.45 trillion. The report reflects a rapidly worsening situation across various sectors, painting a bleak picture of the country’s economic management.
Exploding circular debt and liabilities
The report highlights the circular debt crisis in Pakistan, a problem spiralling out of control. Circular debt has now climbed to a mind-boggling Rs49 trillion, with:
The power sector alone contributing Rs2.4 trillion
Gas and petroleum sectors adding another Rs2.5 trillion
Pension liabilities for retired public employees touching Rs1.7 trillion
These figures raise urgent questions about sustainability and fiscal discipline.
DISCOs lead the downward spiral
Among the worst performers are electricity distribution companies (DISCOs), plagued by inefficiency, power theft, and poor recovery practices:
Quetta Electric Supply Company (QESCO) posted a six-month loss of Rs770.6 billion
Peshawar Electric Supply Company (PESCO) reported Rs684.9 billion in total losses
Sukkur Electric Supply Company recorded a six-month loss of Rs29.6 billion
In just six months, QESCO’s short-term losses alone were Rs58.1 billion—illustrating how deeply the circular debt crisis in Pakistan is tied to energy sector mismanagement.
Losses across other SOEs
The report doesn’t spare other state-owned giants:
Pakistan Steel Mills reported Rs15.6 billion in losses over six months, with total accumulated losses now at Rs255.82 billion
Pakistan Telecommunication Company Limited (PTCL) lost Rs7.19 billion in six months
Pakistan Agriculture Storage and Services Corporation (PASSCO) posted a Rs7 billion loss
These massive deficits not only reflect operational inefficiencies but also point to systemic issues in governance and financial oversight.
The release of this report was a key demand by the IMF under its ongoing agreement with Pakistan. With the IMF pushing for transparency and structural reforms, the government is now under intense scrutiny to overhaul loss-making institutions.
