KARACHI: The president of the Pakistan Businessmen and Intellectuals Forum (PBIF), Mian Zahid Hussain, has called for urgent reforms and privatization of state-owned enterprises (SOEs) following significant financial losses. He emphasized that without these changes, the government will continue to face a substantial financial drain, restricting its ability to invest in public services and infrastructure.

According to Pakistan Businessmen and Intellectuals Forum, a Cabinet Committee meeting on SOEs was held in Islamabad, chaired by Finance Minister Senator Muhammad Aurangzeb. The meeting reviewed the performance of federal SOEs, revealing that profitable entities generated Rs 423.3 billion, while loss-making ones incurred losses of Rs 342.8 billion during the first half of FY2025-26. The total losses for FY2024-25 amounted to Rs 832.8 billion, with 11 entities accounting for Rs 705 billion. Despite government support totaling Rs 804 billion, SOEs contributed Rs 839 billion to the national treasury, resulting in a net positive receipt of Rs 35 billion.

Hussain highlighted that over the past two decades, SOEs have been sustained through budgetary subsidies and other financial aids, which have exceeded Rs 10 to 12 trillion. The total debt of these enterprises has grown exponentially, now standing at Rs 9.57 trillion. This mounting debt includes significant off-balance-sheet sovereign guarantees and unfunded pension liabilities, further burdening the national economy.

The report also indicated that over 85% of long-term losses are attributed to Power Sector DISCOs, exacerbated by transmission losses and poor recovery rates. Other entities like the National Highway Authority, PIA, and Pakistan Railways suffer from non-performing loans and historical overstaffing. Pakistan Steel Mills continues to incur costs despite being closed since 2015.

Hussain underscored the need for privatization by citing the recent auction of PIA, which required substantial financial restructuring to make it viable for private investors. He argued that delays in restructuring and privatizing other loss-making entities will only increase their financial burden on the government and public.

The government’s net portfolio position shows a surplus of Rs 80.5 billion, largely supported by a few profitable entities. Hussain stressed that this surplus is vulnerable and highlighted the need for structural reforms to stabilize the economy and improve consumer services. He advocated for prompt actions aligned with Prime Minister Mian Muhammad Shehbaz Sharif’s directives to privatize commercial enterprises and implement comprehensive reforms.