Pakistan's Public Sector Development Program (PSDP) has been cut by Rs100 billion to fund fuel subsidies, with major reductions impacting the National Highway Authority (NHA) and water sector.

ISLAMABAD: The Pakistan Railways continues to face a significant sustainability gap, with its immediate obligations more than 10 times higher than the current operational surplus, a National Assembly panel was told on Thursday. “Against a current operational surplus of Rs2.4 billion, immediate obligations amount to Rs27.4 billion, highlighting a structural funding shortfall that requires strategic support and long-term financial restructuring to ensure sustainable operations,” Paki­stan Railways’ member of finance told the National Assembly’s Stan­ding Committee on Parli­amentary Affairs, which met here with Rana Iradat Sharif Khan, MNA, in the chair. The secretary of parliamentary affairs briefed the committee on the status of complaints received about Pakistan Railways pensioners to the Prime Minister’s Delivery Unit. The member of finance told the committee that PR has undertaken active liability management to address longstanding emp­loyee obligations, disbursing Rs5.622bn tow­ards commutation payments (cleared up to 31 May, 2023) and Rs1.103bn towards leave encashment (cleared up to 31 March, 2024). He said while these measures reflect improved financial discipline and commitment to institutional responsibility, the huge gap between available resources and the obligations warranted some action. The representative from National Highway Authority (NHA) briefed the committee on the problems caused by traffic congestion on the Motorway Toll Plaza near Phoolnagar, Qasoor district. The committee was informed that in compliance with the approval of NHA Executive Board for revenue enhancement a new toll plaza was established at Phoolnagar, located at KM 1215-1216 in March 2025. Initially, a temporary structured toll plaza (3 × lanes on each side) was established on the existing road. Due to limited numbers of lanes, traffic congestion occurred frequently. Due to establishment of new toll collection regime, the commuters’ response was very slow for toll payments, resulting in long queues of locals at toll booths. Currently, a new 12-lane (6x lanes each side) toll plaza is 90 per cent completed. Published in Dawn, February 20th, 2026

• Accumulated losses hit Rs2.07tr by June 2025; half of it piled up in just three years • Outstanding loans stand near Rs3.1tr, debt rising Rs300bn a year • Financing cost reaches Rs210bn in FY25, highest among SOEs ISLAMABAD: Carrying the largest outstanding loan portfolio on its books and a negative return on assets, the National Highway Authority (NHA) — the country’s logistics backbone — is the single largest entity bleeding the federal budget, exposing Pakistan to substantial fiscal risk despite the recent doubling of tolls. The NHA is the “largest loss-maker”, operating on a “structural deficit model and reliant on budgetary support”, the Central Monitoring Unit (CMU) of the Ministry of Finance said in its Annual Aggregate Report on state-owned enterprises (SOEs) for the year ended June 30, 2025. With accumulated losses of Rs2.074 trillion, the entity that owns and operates all the national highways and motorways accrued around Rs1.004tr in the last three years alone — about Rs295 billion each in FY24 and FY25 and Rs413bn in FY23. Moreover, it stands out at the top of the SOE list, with the largest accrued financing cost of Rs210bn in FY25, as its toll revenue remains unaligned with debt servicing, leading to fiscal dependence and sovereign guarantee exposure. “Currently, the NHA holds outstanding loans totalling approximately Rs3.1tr, with an annual debt accretion rate of Rs300bn. This debt portfolio generates Rs98bn in markup, which is expected to rise to more than Rs150bn per annum, creating a substantial credit risk for the government of Pakistan (GoP), which guarantees these loans”, the CMA said. It said the presence of sovereign guarantees for public-private partnership (PPP) contracts added further financial strain, amplifying the government’s credit risk exposure. With more than Rs115 billion in loans given by the federal government last year, it is also among the top borrowers. On the other hand, its net assets remained almost static over the last three years, actually declining slightly from Rs5.84tr in FY23 to Rs5.83tr in FY25. Its total equity has been declining over time from Rs2.57tr in FY23 to Rs2.27tr in FY24 and Rs1.95tr in FY25. Conversely, NHA’s total liabilities have been increasing, making it the single-largest entity to accrue current liabilities. Its total liabilities amounted to Rs3.27tr in FY23, increasing to Rs3.54tr in FY24 and reaching Rs3.88tr by the end of FY25. The CMU observed that National Highway Authority’s 2025 performance underscored its strategic importance yet exposed growing fiscal vulnerability. “Despite an impressive surge in toll revenues and build, own and transfer (BOT) project inflows, the authority continues to operate under a persistent deficit, driven by high depreciation and finance costs,” it said. Operating income rose sharply to Rs83.1bn in FY25 (against Rs42.4bn in FY24), propelled by the doubling of toll income to Rs64.4bn. However, the overall income of Rs119.7bn remained insufficient against total expenditures of Rs408.1bn. Consequently, the deficit before levy and taxation stood at Rs292.98bn and the deficit after tax at Rs294.86bn, reflecting continued structural stress. It noted that two critical components eroded National Highway Authority’s profitability. These include depreciation expense of Rs133.8bn, reflecting a heavily capital-intensive asset base and growing maintenance backlog and Rs193.5bn finance cost, up from Rs182bn last year, highlighting the escalating burden of debt and interest rate exposure. The CMU advised diversification of funding sources through infrastructure bonds targeted at domestic institutional investors and international development markets. It said the expansion of public-private partnerships for new road construction, maintenance outsourcing and service area development can shift part of the fiscal and operational burden to the private sector while improving efficiency and service quality. The CMU also called for renegotiating loan terms with lenders to extend maturities, reduce interest rates or convert debt into quasi-equity instruments to create immediate fiscal space. Published in Dawn, February 16th, 2026