ISLAMABAD - The previous PML-N government had failed to address the issue of mounting debt and liabilities of the Public Sector Entities (PSEs) that touched Rs1.3 trillion during last fiscal year (FY2018).
The PML-N government had not brought reforms in the PSEs including Pakistan International Airlines (PIA) and Pakistan Steel Mills (PSM) that loaded with huge loans. The collective debt and liabilities of PSEs had swelled to Rs1.3 trillion at the end of previous fiscal year amid government's failure to bring reforms or privatizing these PSEs.
The debt and liabilities of PSEs had gone up by over 23.5 percent on annual basis, as it recorded at Rs1.05 trillion by June last year. Liabilities alone had swelled to Rs231.3 billion by June 2018, according to the data of State Bank of Pakistan. Similarly, the debt of the PSEs had increased to Rs1068.2 billion at the end of June 2018 as compared to Rs822.8 billion a year ago, showing an increase of almost 30 percent.
The debt is increasing at rapid pace as ailing PSEs could not meet its expenses due to their heavy losses.
The previous government had failed to privatise the loss-making PSEs including PIA, Pakistan Steel Mills and power sector companies in last five years. However, the government in-waiting, PTI, has vowed to establish a 'wealth fund' to run the PSEs including PIA, PSM and others.
These PSEs would be run by appointing and empowering non-political and autonomous boards instead of concerned ministries. The idea of a wealth fund is modelled on the concept of Khazanah in Malaysia, which is a sovereign wealth fund of the government. It holds and manages selected commercial assets of the government and undertakes strategic investments on behalf of the nation.
The new government would have to create fiscal space to clear the debt of PIA and PSM.
According to the official figures, PIA's debt has increased to Rs146 billion at the end of June 2018 as compared to Rs122.4 billion of a year ago. The PIA still needs billions of rupees to meet its expenses as well as to get new airplanes on lease.
Debt of Pakistan Steel Mills remained at Rs43.2 billion. The PSM was forced to shut down three years back.
The PSM management is not in position to pay the salaries to the employees. The federal government is paying salaries to the PSM's workers from its own resources. The government had failed to privatise Pakistan Steel.
Water and Power Development Authority (Wapda) recorded an increase of over Rs49.8 billion in one year, as its debt increased to Rs131.2 billion at the end of June 2018, which was Rs81.4 billion a year ago. Oil and Gas Development Corporation (OGDC)'s debt has recorded at Rs4.3 billion by end of June 2018.
Meanwhile, debt of other PSEs has swelled Rs743.4 billion at the end of June 2018 as compared to Rs572.6 billion of the last year, according to the latest data of the State Bank of Pakistan.