President of the Pakistan Businessmen and Intellectuals Forum (PBIF) and All Karachi Industrial Alliance, Chairman of the National Business Group Pakistan, Chairman of the FPCCI Policy Advisory Board, and former Provincial IT Minister, Mian Zahid Hussain, has said that the recent losses of state-owned enterprises (SOEs) reflect a deep-rooted structural problem that demands urgent and sustained reforms.
He noted that the Cabinet Committee on State-Owned Enterprises (CCoSOEs) met in Islamabad on September 14, chaired by Federal Minister for Finance Senator Muhammad Aurangzeb, to review the performance of federal SOEs during the first half of FY2025-26. The Committee was informed that profitable SOEs generated Rs 423.3 billion during July-December 2025, while loss-making entities recorded aggregate losses of Rs 342.8 billion. Only 11 SOEs siphoned Rs 705 billion, while total losses were Rs 832.8 billion in FY2024-25. Government support to all SOEs stood at Rs 804 billion, whereas these enterprises contributed Rs 839 billion to the national exchequer, resulting in a net positive receipt of Rs 35 billion for the government.
Mian Zahid Hussain said that an analysis of the past 20-year trajectory reveals a highly alarming scale of financial burden. As of December 2025, cumulative losses from failed commercial SOEs have surpassed Rs 6.5 trillion. In the 2000s, annual aggregate losses ranged between Rs 40 and 90 billion, but these failing entities now lose approximately Rs 2.5 to 3 billion every day. This persistent drain of the national exchequer restricts the government’s ability to invest in essential public services and infrastructure. Ultimately, the business community and the public bear the cost of this continuous wastage through heavy taxation and exorbitant utility bills.
The veteran business leader pointed out that over the past two decades, successive governments have sustained these failing entities through direct budgetary subsidies, development grants, equity injections, and sovereign loan guarantees, totaling more than Rs 10 to 12 trillion. The total debt of SOEs, which stood at around Rs 250 billion in FY2005-06, has multiplied 38 times to reach Rs 9.57 trillion by the first half of FY2025-26. This debt includes Rs 2.16 trillion in off-balance-sheet sovereign guarantees and over Rs 2.03 trillion in unfunded pension liabilities owed by entities like PIA, Pakistan Railways, and power distribution companies (DISCOs). This unproductive use of national capital is crowding out private-sector borrowing, making it harder to provide the capital needed for industrial growth in Pakistan.
Mian Zahid Hussain pointed out that over 85% of these long-term losses stem from Power Sector DISCOs, driven by transmission losses, poor recovery, and non-cost-reflective tariffs. The National Highway Authority (NHA) is weighed down by heavy non-performing loans, while PIA and Pakistan Railways are crippled by historical overstaffing and legacy commercial debt. Pakistan Steel Mills continues to swallow billions of rupees annually in maintenance and salaries, despite being closed since 2015, reflecting sheer administrative negligence.
Mian Zahid Hussain observed that while progress on privatisation is a step forward, the PIA—auctioned in December 2025, with management transferred in June 2026—remains a glaring example of the heavy price paid for decades of delayed privatisation. He pointed out that to make the airline commercially viable for private buyers, hundreds of billions of rupees in legacy commercial debt, accumulated liabilities, and unfunded pensions had to be parked into a state-backed holding company. Consequently, the national exchequer and the public are forced to continually share the financial consequences of past administrative negligence and delays. He stressed that the PIA example must serve as a lesson for policymakers. Delays in restructuring and privatizing other loss-making entities will exponentially multiply their financial burden, which the government and the people of Pakistan will ultimately be forced to bear.
Mian Zahid Hussain specifically highlighted the government’s net portfolio position and noted that while profitable SOEs earned Rs 423.3 billion over the six-month against the Rs 342.8 billion lost by failing SOEs, the resulting surplus of Rs 80.5 billion rests on extremely vulnerable foundations. This surplus relies almost entirely on a handful of profitable entities, particularly oil and gas companies and financial institutions, which are subsidizing the massive burden of failing SOEs. Meanwhile, the public also faces sub-standard services due to the operational inefficiencies of these failing entities.
Mian Zahid Hussain termed the establishment of the Finance Division’s Central Monitoring Unit (CMU) as a positive step towards transparency and emphasized the need for decisive action. He said that, in line with the directives of Prime Minister Mian Muhammad Shehbaz Sharif, the government must immediately get rid of running commercial enterprises, as prompt and transparent privatization, along with deep structural reforms, are absolutely essential to stabilize the economy and to provide world-class services to the consumers.
