ISLAMABAD: Rejecting a report by the Ministry of Finance on the largest losses, the National Highway Authority (NHA) Sunday clarified that the report’s deficit stemmed from non-cash accounting adjustments and reported a net operating income of Rs23.24 billion for FY2024-25.
In a statement, the NHA claimed that a closer examination revealed that it was not incurring genuine financial losses. The reported deficits primarily stem from non-cash accounting adjustments, such as depreciation and revaluation impacts, which do not translate into actual cash outflows, it said.
However, the Ministry of Finance report titled “Bi-Annual Report of State Owned Enterprises for first half of FY2025” stated that the NHA recorded the largest loss of Rs153.3 billion, pushing its accumulated losses to Rs1,953.4 billion — a reflection of the unsustainable toll-revenue model against massive road infrastructure expansion.
The finance ministry had further argued that Pakistan’s infrastructure and transport sector, dominated by NHA and Pakistan Railways (PR), suffered from massive debts, fiscal drains and operational inefficiencies.
The NHA’s heavy borrowing in the form of Cash Development Loan (CDL) and Foreign Relent Loan (FRL) limits its ability to fund new projects, while PR faces pension liabilities, outdated rolling stock and overreliance on grants.
Poor financial accounting and unknown pension liabilities further complicate the risk landscape in the PR. Sustainable debt management, PPP models, real estate development and modernization of rail assets are necessary.
The PR must diversify revenue streams, expand freight operations and implement IFRS to improve transparency and financial viability. The NHA should also diversify its toll revenue and explore other sources of revenue from long haul infra cash flows.
The NHA stated that these adjustments create a divergence between financial performance as presented in accounting statements and the organization’s real-time cash position. This distinction is critical for accurately assessing the NHA’s financial health, as it confirms that the authority’s operations remain cash-positive and are not exerting fiscal pressure on national resources. In essence, the perceived deficits are reflective of technical accounting treatments rather than operational inefficiencies or financial distress.
The NHA has demonstrated fiscal responsibility by predominantly financing its managerial and operational expenses from internally generated revenues, thereby minimizing reliance on the federal government. This self-sustaining approach reflects the NHA’s commitment to financial autonomy and efficient resource management.
The financial highlights of the National Highway Authority for the recently concluded year 2024-25 reflect the outcomes of strategic initiatives undertaken by the management to advance self-sustainability; Increase in income; 62% increase in annual operating income from preceding year as operating income increased from PKR66.8 billion to PKR 108.2 billion. Reduction of expenditures; 31% reduction in the operating expenses on account of road maintenance activities as expenditures from last year decreased from PKR 88.3 billion to PKR 61.1 billion. Cashless economy; By realizing its role, the NHA in January 2025 encouraged cashless transactions on motorways and right now about 64% toll revenues are being collected through M-Tag as compared to 19% in January 2025.
After meeting its operational costs, the surplus generated from these streams contributes to a net cash inflow, reinforcing the NHA’s financial resilience and supporting its long-term development objectives, the authority concluded.