NHA Accumulated Losses Cross Rs. 2.06 Trillion: Audit Report

The National Highway Authority has accumulated losses of more than Rs. 2.06 trillion by the end of FY2024-25 after posting net operational deficits for 10 consecutive years, according to the latest findings of the Auditor General of Pakistan.

A detailed audit review pointed to a deepening fiscal crisis at the NHA, driven by structural inefficiencies, rising debt obligations and persistent gaps between revenue and expenditure.

According to audited financial data, the authority’s annual deficit after taxation remained on an upward trend over the last decade. The post-tax deficit stood at Rs. 157.37 billion in FY2015-16, Rs. 133.83 billion in FY2016-17, Rs. 157.65 billion in FY2017-18, Rs. 172.60 billion in FY2018-19, Rs. 94.38 billion in FY2019-20, Rs. 254.57 billion in FY2020-21, Rs. 169.50 billion in FY2021-22, Rs. 413.45 billion in FY2022-23, Rs. 318.03 billion in FY2023-24 and Rs. 288.54 billion in FY2024-25.

The audit said operating expenses continued to outpace revenue growth, mainly because of high administrative costs and the expanding maintenance burden of the road network.

As a result, key financial indicators remained negative throughout the period. The net profit ratio fell to minus 327.93pc in FY2023-24 before improving slightly to minus 236.47pc in FY2024-25. Return on assets remained negative at minus 5.49pc in FY2023-24 and minus 5pc in FY2024-25, while return on capital employed stood at minus 3.38pc and minus 2.40pc respectively.

The NHA’s total revenue increased from Rs. 28.12 billion in FY2015-16 to Rs. 122.02 billion in FY2024-25, driven by periodic increases in toll rates, network expansion and the introduction of electronic tolling through M-Tag.

Toll revenue alone rose from Rs. 32.10 billion in FY2023-24 to Rs. 64.42 billion in FY2024-25, accounting for 52.80pc of total revenue. Revenue from right of way stood at Rs. 3.778 billion, or 3.10pc of total revenue, but remained underutilised due to delayed GIS surveys and unresolved lease issues.

Despite higher revenue, the authority continued to face acute liquidity stress. Current liabilities increased nearly 2.8 times from Rs. 706 billion in FY2015-16 to Rs. 2,028 billion in FY2024-25, while current assets rose from Rs. 138 billion to only Rs. 215 billion over the same period.

This left the NHA with a current ratio and quick ratio of just 0.11 in FY2024-25, indicating severe difficulty in meeting short-term obligations without external support.

As of June 30, 2025, the authority’s long-term assets stood at Rs. 5,612.494 billion, taking total assets to Rs. 5,827.935 billion. Total liabilities were recorded at Rs. 3,870.438 billion. After accounting for a revaluation surplus on property, plant and equipment of Rs. 4,024.89 billion, total equity stood at Rs. 1,957.50 billion.

The audit said the NHA’s overall debt burden had reached Rs. 3,756.00 billion in FY2024-25. This included current liabilities of Rs. 555.39 billion for repayment of matured long-term loans, while non-current long-term loans stood at Rs. 1,799.31 billion after adjustment of a deposit of Rs. 2.86 billion with the State Bank of Pakistan.

A 10-year cash flow analysis showed that net cash from financing activities reached Rs. 160.88 billion in FY2024-25, while operations and investments posted outflows of Rs. 21.03 billion and Rs. 130.23 billion respectively. Over the decade, cash balances rose only modestly from Rs. 111.68 billion to Rs. 132.19 billion, reflecting a compound annual growth rate of 1.7pc.

The audit also highlighted weakening efficiency indicators. Debtor turnover days increased from 107 days in FY2015-16 to a peak of 376 days in FY2023-24 before easing to 221 days in FY2024-25, pointing to delays in recovering receivables.

By contrast, creditor turnover days fell sharply from a peak of 654 days in FY2017-18 to just two days in FY2024-25, indicating that supplier payments were being made quickly with the help of financing inflows.

Although the statutory audit carried an unqualified opinion, it included an emphasis of matter on extensive outstanding litigation exposing the authority to heavy financial risks.

These included land acquisition disputes worth Rs. 114.497 billion, contractor claims of Rs. 254.245 billion and contested right-of-way lease claims with a potential financial impact of Rs. 3.419 billion.

The audit concluded that weak legal representation and delayed responses had repeatedly resulted in adverse arbitration awards and additional financial liabilities, reinforcing the authority’s overall high-risk rating in terms of debt sustainability and legal operations.