A report of the Finance Ministry on State Owned Enterprises (SOEs) shows performance of the public sector entities improved to some extent during financial year 2024 due to the reform process, strict monitoring and improved management.
It shows gross revenues of federal SOEs reached Rs13,524 billion, reflecting a 5.2% increase YoY; total aggregate profits were Rs820 billion, a 14.61% increase YoY while loss-making SOEs reported aggregate losses of Rs851 billion, a 14.03% decrease YoY for the 12 months ending June 2024.
The top 15 profit-making entities were led by OGDCL at Rs208.9 billion whereas National Highway Authority (NHA) incurred the largest loss at Rs295.5 billion.
The increase in profitability and decrease in aggregate losses of the state owned enterprises is a testimony that they are not mere burden on the national exchequer as is being generally touted and that there was scope for improving their efficiency with reforms and better management.
Otherwise too, there was absolutely no justification for a majority of them to incur losses as they either enjoy monopoly in their fields of operation or have an elaborate wherewithal at their disposal to make an impact.
It may also be pointed out that these entities did not turn into loss-incurring institutions overnight but in decades due to neglect and wrong policies of the successive governments and understandably it will take some time to make them profitable again.
The report makes special mention of power distribution companies (DISCOs), which are hemorrhaging around $1 billion annually due to rampant line losses, theft and inefficiencies, crippling their ability to upgrade infrastructure and jeopardizing the long-term viability of the energy sector.
This is worrisome but most unfortunate is the conclusion drawn by the relevant bureaucrats sitting in the ministries of Energy and Finance Division, who are still attributing the sorry state of affairs of Discos to infrequent tariff adjustments despite the fact that the tariff is the highest in the region and it is frequently adjusted upward on different excuses like the need to increase the baseline tariff, monthly fuel adjustments and quarterly adjustments besides imposition of a host of taxes on bills.
This myopic approach needs to be changed and the focus instead should shift to elimination of rampant corruption, misuse of resources, theft, line losses and outdated transmission and distribution systems.
What an irony that apart from excessive pricing, Discos have recently jacked up the cost of a single-phase meter from Rs.11,000 to Rs.35,000 and that of three-phase to Rs.
85,000 but the report claims frequent government interventions and delays in tariff adjustments prevent DISCOs from charging consumers the true cost of electricity!
