Net losses of over Rs61 billion were registered by the Pakistan Railways for the fiscal year 2024-25, representing a rise of Rs9 billion, or 19.11 percent, over the preceding period, as indicated by the Auditor General of Pakistan’s report. The government-owned corporation earned gross revenues of Rs92.7 billion against operating expenses of almost Rs153 billion, resulting in an operating loss of Rs60 billion and an operating loss ratio of 65 percent.
Losses experienced by Pakistan Railways in financial year 25 indicate the revenue versus expenditure problem that has escalated year after year for the past five years. Working costs have increased by 60% in the period from fiscal year 2020-21 to 2024-25, with losses increasing by 29% during the same period.
A Federal Grant Conceals a More Serious Problem of Dependency
For its survival, Pakistan Railways needed Rs64.03 billion worth of grants from the federal government in the fiscal year 2024-25. In the absence of such grants, the financial status of the company would have been much worse than what is reported. From the AGP’s report, it is evident that Pakistan Railways’ loss for the financial year 2025 is more than a passing problem.
The revenue reserve account did not change and stood at Rs26.05 billion for the second year running, showing that there was no earning retained. The current liability account grew by 46.41 percent to Rs29.28 billion from Rs19.99 billion in the previous year.
Observations Amounting to Rs34.42 Billions
Observations amounting to Rs34.42 billion regarding Pakistan Railways and their subsidiaries. A detailed analysis reveals that there were system failures in various operational levels: Rs24.6 billions in budgetary irregularities, Rs11.2 billions in financial mismanagement, Rs7.2 billion in project mismanagement, and Rs11.5 billion in non-budgetary irregularities.
The audit was done on 84 out of 160 formations, analyzing Rs105.6 billion worth of expenditures and Rs84.25 billion worth of receipts, which shows that a large percentage of the organisation’s transactions are not within the ambit of audit.
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Unused Amount in Presence of Outstanding Liabilities
With respect to Revenue Grant No. 85, Pakistan Railways utilised Rs154.21 billion out of a total budgeted amount of Rs157.84 billion, resulting in an unused amount of Rs3.63 billion or 2.30%. The AGP observed that management did not utilise funds despite having interest liabilities in connection with foreign loans.
With respect to Capital Grant No. 133, the disparity was even greater. Of an allocation of Rs34.80 billion, Rs30.59 billion had been spent by Pakistan Railways, leaving an amount of Rs4.21 billion (or 12.11%) unused. The AGP identified inadequate budgetary controls as the main reason for this disparity and criticized management for not utilizing these funds.
Growth in Fixed Assets, but Decline in Working Capital Utilization
The total assets were Rs515.33 billion for the year FY2024-25. But the growth in fixed assets was up to 17.26%, whereas it surpassed the current assets and diminished the utilization of working capital. Also, the sum of Rs34.34 billion arising from commutation, GPF, and other heads was not debited to the Profit & Loss Account.
More importantly, the audited financial statements of Redamco for FY2024-25 were done by a private chartered accounting firm without any statutory approval from AGP. Financially audited statements of other subsidiaries like PRACS, RAILCOP, and PRFTC have not been made available to the audit committee.
AGP Requests Immediate Implementation of a Financial Turnaround Strategy
The AGP report ends with an ominous warning: unless there is some improvement in internal controls and budget management and some effective financial turnaround strategy, Pakistan Railways will continue to depend on the federal government for its survival. Pakistan Railways’ financial losses FY25 prove that poor financial control and poor capital fund management are recurring issues that need to be addressed.
When it comes to a national entity carrying millions of passengers and tonnes of cargo each year, there is much more at stake than just the bottom line.
Nayab Fatima is a media professional specializing in fact-based journalism, research, and analytical reporting on technology, telecom, aviation, and automobiles.
