Pakistan Railways suffers net loss of over Rs61 billion, reveals Auditor General

Audit report highlights worsening 19.11 per cent spike in deficit for FY2024, 25 and unearths billions in financial irregularities.

Pakistan Railways suffered a massive net loss of over Rs61 billion during the financial year 2024, 25, marking an increase of Rs9 billion or 19.11 per cent compared to the preceding fiscal year. The latest report from the Auditor General of Pakistan (AGP) indicates that the state-owned enterprise faces severe financial instability, driven primarily by a widening gap between its earnings and operational expenditures.

According to the audit document, Pakistan Railways registered an operating loss of Rs60 billion for the year, pushing its operating loss ratio to a staggering 65 per cent. Data spanning the last five financial years highlights a deepening systemic crisis. In FY2024, 25, total revenue stood at Rs92.7 billion, whilst overall operating expenses escalated to approximately Rs153 billion. Between the 2020, 21 and 2024, 25 fiscal periods, operating expenses surged by 60 per cent, whilst operational losses grew by 29 per cent, underscoring management’s failure to achieve a sustainable financial break-even point.

The scope of the AGP’s review was restricted to 84 out of 160 formations within Pakistan Railways, assessing Rs105.6 billion in expenditures and Rs84.25 billion in receipts. The process exposed widespread financial irregularities totalling Rs34.42 billion across the railway network and its subsidiaries. These discrepancies included Rs24.6 billion in budget-related irregularities, Rs11.2 billion tied to weak internal financial management, Rs11.5 billion stemming from non-budgetary issues, and Rs7.2 billion linked to project management shortcomings.

The audit also identified anomalies regarding land, inventory, and asset management. Under Revenue Grant Number 85, the enterprise spent Rs154.212 billion against a final allocation of Rs157.839 billion, leaving Rs3.627 billion unutilised. Whilst this saving falls within the acceptable 5 per cent threshold, the AGP criticised the administration for leaving these funds idle despite carrying heavy interest liabilities on foreign loans.

Similarly, under Capital Grant Number 133, the organisation failed to utilise Rs4.214 billion, which constitutes 12.11 per cent, of its Rs34.799 billion development budget. The Auditor General strongly censured this ineffective financial planning, noting that vital federal resources earmarked for critical infrastructure upgrades were left completely untouched.

Though the total assets of Pakistan Railways were valued at Rs515.330 billion for the fiscal year, its revenue reserves remained entirely frozen at Rs26.05 billion for the second consecutive year. The report concludes that the institution’s inability to generate retained earnings continues to severely impair its long-term profitability and structural viability.