The latest consolidated report by the Ministry of Finance reveals that state-run commercial entities in the nation incurred staggering losses amounting to Rs1.395 trillion over the fiscal years 2021 and 2022.
This figure, more than twice the size of the Public Sector Development Programme (PSDP), raises concerns about financial management and operational efficiency in the public sector. The report, titled ‘Federal Footprint State-Owned Enterprises (SOEs) Consolidated Report FY2020-22,’ aligns with International Monetary Fund (IMF) performance benchmarks.
Out of the 81 evaluated SOEs, 50 reported a combined profit of Rs568.44 billion in fiscal 2022. However, the Rs730.26 billion cumulative loss of the remaining 31 entities resulted in a net loss of about Rs162 billion. The previous fiscal year (2021) saw a net loss of over Rs238 billion, with 56 entities reporting a total profit of Rs427.43 billion, overshadowed by 25 entities posting a cumulative loss of Rs665 billion.
The report highlights peculiar instances, such as Pakistan Steel Mills’ shift from a loss of Rs18.75 billion in 2021 to a profit of Rs7.15 billion in 2022 despite being non-operational for almost a decade. Additionally, four power distribution companies experienced significant losses in 2022 after being profitable in 2021.
The National Highway Authority (NHA) remained the top loss-making entity for both years, with a combined loss of Rs422 billion. Despite these losses, the report emphasizes that commercial SOEs contribute significantly to the national economy through corporate taxes, dividends, and employment.
The financial sector’s assets, comprising banks, insurance companies, Non-Banking Financing Companies (NBFCs), and Development Financial Institutions (DFIs), reached Rs8.9 trillion in fiscal year 2022, showing consistent growth. The Infrastructure, Transport, and Communication (ITC) sector stood as the second-largest, with an asset base of Rs7.98 trillion, but faced challenges in balancing socio-economic goals with operational efficiency.
The manufacturing, mining, and engineering sector showed robust growth, while the oil and gas sector experienced revenue expansion due to energy price surges. The power sector, with assets totaling Rs6.48 trillion and a workforce exceeding 139,000 individuals, faced equity challenges and operational margin concerns.
State-run media, including Pakistan Broadcasting and Pakistan Television, remained a burden on the public budget, paying zero dividends to the government. Although PTV remained profitable in 2021 and 2022, its financial performance showed a decline. Pakistan Broadcasting exhibited declining financial performance, contributing to a Rs742 million loss in the government’s media entertainment segment in 2022, compared to a Rs1 billion profit in the 2019 fiscal year.
