The country’s loss-making public-sector enterprises (PSEs) have further borrowed Rs. 77 billion from local banks to run their affairs during the first three months of the current fiscal year 2022-23.
A senior official of the Finance Ministry told Propakistani that the PSEs have net borrowed from local banks Rs. 76.93 billion which is almost six times high as compared to the same period of the last fiscal year. The PSEs obtained Rs. 13 billion from local banking to run its business on the government guarantee during the first quarter of the last fiscal year.
The data shows that the PSEs have become a white elephant for the national exchequer as bank borrowing of these institutions is in addition to the hundreds of billions that the government injected to run these organizations from the budget.
The top ten loss-makers, which include Pakistan International Airlines (PIA), Pakistan Railways, power companies and the National Highway Authority, account for around 90 percent of the total losses each year.
Despite attempts by successive governments to turn them around, they have failed in making these entities even break even.
These organizations are depending on government money and borrowing instead of improving their income by adopting the latest and most productive business model.
Even in the case of profit-making state-owned enterprises (SOEs) such as the oil and gas sectors, the operational efficiency and profitability compare poorly to their peer group in the private sector globally.
According to the data, the total debt stock of the PSEs from local banks has reached Rs. 1.47 trillion after the new loan. The debt stock is clearly showing that these institutions are a burden on the state and only eating public money.
Successive governments have been hesitant to embark on an aggressive privatization program because of different reasons including strong resistance from opposition parties and trade unions of these organizations against the privatization process.