KARACHI: Public sector enterprises (PSEs) have eaten up almost Rs500 billion within two years as their outstanding debts increased to Rs1.068 trillion at the end of June 30, 2018.

According to official data, PSEs debts in FY16 were Rs588bn and Rs822.8bn in FY17. The current debt figures show an increase of 88 per cent compared to FY16 and 29.8pc from FY17.

The debts and liabilities of PSEs cumulatively rose to Rs1.3tr compared with Rs793.4bn in FY16 and Rs1.052tr in FY17, an increase of 64pc in the last two years.

PSE debts valued 3.8pc of GDP in FY18, up from 2pc of in FY16 and 2.6pc in FY17.

The previous government tried to get rid of some large public entities – Pakistan International Airline (PIA) and Pakistan Steel Mills (PSM) – but failed mainly due to resistance from opposition parties in the parliament. The newly elected government has also expressed its willingness to sell loss-making PSEs but it is likely to face similar hostility.

In the list of loss-making PSEs, PIA emerged on the top with a loss of Rs146bn in FY18 ending June 30 compared to Rs99.8bn in FY16 and Rs122bn in FY17.

The losses of Water and Power Development Authority (Wapda) surged to Rs131.2bn in FY18 from Rs55.8bn in FY16 and Rs81.8bn in FY17.

The losses of PSM have been stagnant at Rs43.2bn since FY16.

The privatisation of PIA and PSM has been extremely difficult for all previous governments despite the fact that the national carrier is being run on taxpayers money while the PSM has already become un-operational. The divestment of these two PSEs will render thousands jobless.

Published in Dawn, August 28th, 2018