ISLAMABAD: The government announced on Friday that 15 state-owned enterprises (SOEs) accounted for 99.3 per cent of cumulative losses during the first six months of FY24, highlighting widespread inefficiencies and operational issues within the SOE sector.
In absolute terms, the cumulative losses of these SOEs were estimated at Rs405.86 billion between July 2023 and December 2023. In contrast, the losses of all other SOEs were Rs2.812bn, according to the Finance Ministry Federal State Owned Enterprises Bi-Annual report on SOEs for FY24.
However, it was further pointed out that overall SOE losses decreased by 9.72pc compared to the previous year’s losses of Rs452.686bn over the same months. Since 2014, the accumulated losses have reached a total of Rs5.9 trillion. The government has already formed an SOE committee to categorise SOEs and define their paths toward privatisation or other corporate restructuring options. The committee aims to leverage private sector participation for enhanced efficiency and reduce the footprint of SOEs on the public purse.
Finance Minister Muhammad Aurangzeb chairs the committee, but it moves slowly.
The breakdown indicates that the National Highway Authority (NHA) reported the highest loss of Rs151.3bn, followed by Quetta Electric Supply Company Ltd with Rs56.2bn and PIA with Rs51.7bn. Peshawar Electric Supply Company Ltd reported a Rs39bn loss, whereas Pakistan Railways recorded a Rs23.6bn loss during the months under review.
Further data shows that the losses of Sukkur Electric Power Company Ltd, Pakistan Steel Mills Corporation (Pvt) Ltd, and Islamabad Electric Supply Company Ltd also reported considerable losses of Rs20.9bn, Rs14.4bn, and Rs12.1bn, respectively.
The Central Power Generation Company Ltd (GENCO-II) reported a loss of Rs8.3bn, PTCL Rs7.7bn, Pakistan Post Office Rs5.5bn, and several electric supply companies like Hyderabad Electric Supply Company Ltd Rs5.2bn, Tribal Electric Supply Company Ltd Rs2.6bn followed by Sui Southern Gas Company Ltd Rs4.6bn. Utility Stores Corporation (Pvt) contributed Ltd Rs2.1bn to cumulative losses.
The government extended fiscal support totalling Rs436bn over the six months ending December 2023. This support was divided into Rs120bn in grants, Rs231bn in subsidies, and Rs85bn in loans. Notably, no equity injections were made during this period. This financial intervention accounted for over 7pc of the federal budget’s receipts on an annualised basis.
The report also quantified Discos based on line losses during the first six months of FY24. Lesco came in first with a line loss of Rs323.46bn, followed by Mecpo with Rs272.96bn, Fesco with Rs217.41bn, and Gepco with Rs159.32bn, which was drastically reduced to Rs26.88bn in the case of Tribal Electric Supply Company Ltd.
The line losses of Hesco are estimated at Rs59.78bn, followed by Iesco at Rs68.72bn, Sepco at Rs62.84bn, Peshawar Electric Power Company Ltd at Rs186.03bn and Quetta Electric Supply Company Ltd at Rs86.72bn.
The top 15 profit-making entities for the six months of July-December 2023 demonstrated strong financial performance with a profit of Rs510.20bn, while the profits of all other SOEs were Rs50.20bn. Of these, the OGDCL led with a profit of Rs123.2bn, followed by Pakistan Petroleum Ltd with Rs68.7bn, and National Power Parks Management with Rs36.2bn. Other significant contributors include Pak Arab Refinery Company with Rs35bn and Government Holdings (Pvt) Ltd with Rs32.5bn. Additional profitable entities include the National Bank of Pakistan with Rs26.6bn and the Port Qasim Authority with Rs18.4bn.
The gross revenues of the SOEs reached Rs7.011tr, reflecting a 15pc increase from the previous year’s
corresponding period. However, the SOEs contributed Rs200bn in taxes, reflecting a 14pc decrease compared to the previous six months. Non-tax revenues, which include sales taxes, royalties, and levies, amounted to Rs349bn, representing a 27pc decline. Dividends provided were Rs9bn, a significant 71pc decrease.
Published in Dawn, December 28th, 2024
