Despite earning of billions, National Highway Authority (NHA) has recorded a net loss of Rs 294.86 billion in fiscal year 2025 as its outstanding loans climbed to Rs 2.328 trillion, Pakistan Observer has learnt reliably.
Finance Ministry suggested a clear business model, stricter checks on infrastructure projects and a clearer difference between motorways that can make money and roads built to serve the public.
In its report “Federal State-Owned Enterprises Annual Report 2025”, the Finance Ministry said that NHA’s loss was marginally lower than the Rs295.58 billion recorded in FY2024. However, the slight improvement came despite a sharp increase in revenue while its debt and financing costs continued to weigh on its financial position.
According to the report, the authority’s revenue rose by nearly 85 per cent to Rs100.25 billion in FY2025, from Rs54.15 billion a year earlier. However, operating expenses reached Rs214.59 billion, leaving it with an operating loss of Rs114.34 billion before financing and other costs.
The NHA paid Rs193.49 billion in interest on its borrowings during FY2025, up from Rs155.36 billion in the previous year — an increase of more than Rs38 billion in a single year.
Its outstanding loans rose to Rs2.328 trillion by June 2025, compared with Rs2.183 trillion a year earlier. These included Rs1.450 trillion in Cash Development Loans from the federal government, used to finance road construction, and Rs878.20 billion in foreign loans.
The report also put the authority’s interest burden at Rs1.430 trillion, up from Rs1.243 trillion in FY2024. The two figures relating to the interest burden and annual interest payments reflect different reported measures and should not be treated as interchangeable.
The NHA’s accumulated losses increased to Rs2.074 trillion in FY2025 from Rs1.798 trillion a year earlier. Its assets were valued at Rs5.83 trillion, while liabilities stood at Rs3.88 trillion.
Despite its growing revenue and substantial asset base, the authority continued to rely on government-backed financing.
During FY2025, it received Rs115.30 billion in loans and Rs17.11 billion in grants, while total government outflows recorded against the NHA amounted to Rs132.40 billion, according to the report.
One positive indicator was an improvement in the authority’s operating-cost recovery ratio, which rose to 0.47 in FY2025 from 0.26 in the preceding year. However, the improvement did not prevent the NHA from recording another substantial annual loss.
The Finance Ministry has warned that continued borrowing to finance road infrastructure could place an increasing burden on public finances, particularly as the cost of servicing existing debt rises.
It has recommended a transparent business model that distinguishes commercially viable motorways from roads built primarily to meet public-service needs.
“Where projects are not expected to generate sufficient revenue, viability-gap funding should be explicitly provided for in the budget,” the ministry said.
The ministry also called for toll rates to be determined through a credible financial model and cautioned against politically motivated decisions that could quietly add to the NHA’s liabilities.
It said that every major infrastructure project should undergo rigorous scrutiny of construction costs, completion delays, financing arrangements and expected traffic volumes.
“Public-private partnerships and Build-Operate-Transfer arrangements could help finance projects where traffic and revenue prospects justified them,” the ministry said, adding that such arrangements must not simply transfer hidden risks back to the government.
The ministry cautioned that although the national highway network represented an asset worth trillions of rupees, an organisation that continually borrowed to service existing debt risked turning that asset into a long-term liability for the state.
A senior NHA official, speaking on condition of anonymity, said Pakistan needed to move away from costly road construction practices that made every kilometre more expensive for taxpayers.
The authority’s biggest problem was financing, the official said, adding that while the state wanted to build more roads and bridges, paying for them was becoming increasingly expensive.
A few days earlier, NHA Chief Executive Officer Captain (retd) Asadullah Khan told a Senate standing committee that the authority had collected around Rs179 billion in toll taxes across the country. He also acknowledged that the motorways no longer met the standards they had when Korean companies first built them many years ago.
