KARACHI: Debts and liabilities of public sector enterprises (PSEs) have gone beyond half a trillion rupees, and even privatisation of all PSEs can’t yield the amount to pay back the debts these entities owe, reported State Bank in a recent report.

Since the formation of the new government, privatisation of public sector enterprises is being given priority, as government believes that these PSEs were eating up a large chunk of taxpayers’ money.

State Bank’s latest edition of Statistical Bulletin-Jan-14 reveals that the large public units were heavily indebted while they are still in loss, having no strategy to come out from this mess.

Total debts and liabilities of these PSEs rose to Rs563 billion till end September 2013.

Large enterprises, like Pakistan Steel and Pakistan International Airlines, were the largest borrowers while they were still empty and asking the government to help them survive.

The government has recently announced that PIA and Pakistan Steel would be privatised, but it has become a political question since the opposition in the parliament has opposed the plan apparently to secure thousands of jobs.

Details showed that PIA alone owes Rs65.9bn debt which is the highest amount among debts of PSEs. For more than a decade, PIA has been a loss-making public unit while all efforts to privatise PIA in 1990s failed due to serious pressure from opposition political parties. However, it was never tried to bring it back on track as a profitable airline.

Pakistan Steel which had been a profit making unit during the first decade, became sick and is now ailing under heavy debt of Rs42.4bn.

Its privatization is also under serious opposition from political opponents of the federal government.

The debts of Wapda were Rs17.3bn till September. These PSEs were also provided hundreds of billions during a decade from tax payers’ money but no positive results could be obtained.

The SBP report shows that excluding these huge units, the amount of debts was Rs220.3bn for other PSEs. Along with these debts, liabilities of these PSEs were Rs216bn.

This amount of debt and liabilities is so huge that the government cannot extract from sale to these PSEs.

If the government succeeds to sell out some large PSEs, it can save several hundred billions.

Since the size of the Gross Domestic Product (GDP) has been increasing each year, the ratio of debt of PSEs to GDP does not show any significant change.

At the end of September 2013, debt of these PSEs was 2.3pc of GDP. In September 2012, the debt was 2.2pc of the GDP.