Rs288bn plan being rolled out for SOEs’ growth without federal funding

ISLAMABAD: The government will roll out Rs288 billion ($1.02 billion) investment plan for selected state-owned enterprises (SOEs), aiming to accelerate infrastructure upgrades and economic productivity without leaning on federal budget allocations.

The government’s new strategy empowers top-performing SOEs to finance their own development projects outside the traditional Public Sector Development Programme (PSDP), focusing on critical sectors such as energy, telecoms, water, and defence production.

Officials say the move signals a shift towards performance-based public investment and fiscal self-reliance. Leading the charge is the Petroleum Division, with Oil and Gas Development Company Ltd (OGDCL), Sui Northern Gas Pipelines Ltd (SNGPL), Sui Southern Gas Company Ltd (SSGC), Pakistan Mineral Development Corporation (PMDC), and Pak-Arab Refinery Ltd (PARCO) collectively investing Rs109 billion.

The Power Division, including NTDC and PEPCO, will follow with Rs77 billion, while IT and telecom entities such as PTA, NTC, and the Universal Service Fund (USF) are set to spend Rs34.4 billion.

Wapda, under the Water Resources Division, is mobilising Rs26 billion in a bid to boost water security and climate resilience, while the Pakistan National Shipping Corporation (PNSC) will deploy Rs1.8 billion.

Earlier, the planning ministry asked all divisions to compile non-PSDP development interventions being executed by SOEs and related bodies, forming the basis of a new investment map aimed at bolstering transparency, public-private partnerships, and sectoral efficiency.

While economists have praised the initiative’s scale, they warn that channeling large sums through underperforming entities without meaningful reform may limit its impact. “Unless governance in loss-making SOEs improves, the capital infusion could fall short of intended outcomes,” an official said.

Notably, SOEs have reported total losses of Rs851 billion and outstanding loans of Rs9.2 trillion in FY2023-24—nearly matching the Federal Board of Revenue’s annual tax collection, according to the Ministry of Finance’s annual report.

After adjusting for profits from entities under the Pakistan Sovereign Wealth Fund, net losses stood at Rs521.5 billion, with limited free cash flow. Power sector firms remained the biggest drain, while the National Highway Authority alone posted a loss of Rs295.5 billion. Despite a 5.26 per cent rise in total revenues to Rs13.5 trillion, net losses surged 89 per cent, underscoring severe financial and credit risks.

OGDCL stood on top of the profit-making firms with Rs208bn, followed by Pakistan Petroleum Ltd at Rs115.4bn and National Power Parks at Rs76.8bn. Government Holding Pvt Ltd (GHPL) profit amounted to Rs69.1bn, Pak Arab Refinery Company at Rs55bn, Port Qasim Authority at Rs41bn, Mepco at Rs31.8bn, NBP at Rs27.4bn and Wapda at Rs22.2bn. KPT’s profit was reported at Rs20.3bn, PNSC at Rs20.1bn, PSO at Rs19.6bn and State Life Insurance Corp at Rs18.3bn, the report said.