Policy Brief: SOE Privatization in Focus
Pakistan’s privatization agenda has entered a new chapter. After decades of mounting losses, chronic inefficiencies, and growing fiscal strain, the government has committed to a 5-year roadmap to divest 24 state-owned enterprises across three phases — with the high-profile auction of Pakistan International Airlines to the Arif Habib Consortium marking the most visible milestone yet.
This policy brief by InsightLab at the Karachi School of Business and Leadership takes stock of where Pakistan stands, what the numbers actually reveal, and what the path ahead demands. The financial picture is sobering: in FY25, the commercial SOEs collectively recorded net losses of PKR 122 billion, requiring government support of PKR 2,075 billion — roughly 12% of aggregate budgetary receipts — in the form of subsidies, equity injections, loans, and grants.
The 24 pipeline entities included in the privatization agenda are major contributors to this burden. Despite accounting for 30% of aggregate SOE revenues, their losses stood at PKR 128B in FY25, i.e. absent them, the broader portfolio would have posted a net profit. Understandably, bleeding is heavily concentrated in power, where seven of the nine loss-makers reside with Peshawar Electric alone posting a PKR 92B loss.
Cumulatively, these entities received approximately PKR 771B in government support in FY25. Successfully shedding Phase II’s six power-sector companies alone could shave roughly 1.8% off federal expenditure. The pipeline, however, is not simply a collection of distressed assets. It also includes profitable entities such as State Life Insurance Corporation or critical public goods provider, the National Highway Authority. Therefore, any conversation on divestment requires a