ECO's way forward
Attaining proactivity in regional cooperation is becoming a sine qua non as distractions continue to haunt geopolitics. The 17th ECO Summit in Azerbaijan's city of Khankendi took a leap forward as it called for buoying understanding among the member states to overcome bilateral frictions and ensure that geo-economics takes roots.
Pakistan flagged the Iran-Israel war, the adamant attitude of India, especially the IWT's unilateral suspension, and the backlash of terrorism from Afghanistan as obstacles hampering regional serenity and development. Prime Minister Shehbaz Sharif underscored that the 10-nation Eurasian bloc offers the 'best hope' for a unified response, and there should not be any looking back.
Pakistan also underlined the necessity of quality development in relevance with climate change considerations. It also proposed developing low-emission corridors, ECO-wide carbon market platforms and a regional disaster resistance system. It's high time the cobweb of railways, roads and waterways, which have successfully been laid down across the region, came to benefit the common man in terms of employment, cheap products and a semblance of growth. So is the case with energy channels that are still in limbo, like the IP gas pipeline, TAPI, CASA-1000 and the trans-Afghan railway connectivity.
The point that some of the states are mulling a 'military alliance' in the region has been promptly negated by Pakistan, as it hopes India will give up its confrontational policy and make SAARC a viable entity. Peace between Pakistan and India is indispensable if regional cooperation is to materialise. The potential could be gauged from the fact that according to SBP, imports from India totalled $211.5 million in the first 11 months of FY25; and in May alone when the conflict broke out, imports stood at $15 million.
The India-based Global Trade Research Initiative has also reported recently that India's unofficial exports to Pakistan are estimated at $10 billion annually, routed primarily through Dubai, Colombo and Singapore. The need is to get it straight for the collective good of the region.
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Express Tribune
2 hours ago
- Express Tribune
PIA incurs net loss of Rs4.6 billion
Listen to article The finance ministry has disclosed in a report that Pakistan International Airlines (PIA) last year incurred a net loss of Rs4.6 billion and one-off accounting profit of Rs26 billion due to treating past losses as future assets "should not be misinterpreted as a sign of operational profitability". The biannual report on federal state-owned enterprises (SOEs) has again highlighted the inefficiencies of PIA, though it has been freed from legacy debt and liabilities. The Central Monitoring Unit (CMU) of the Ministry of Finance released the report on Friday, which gave an in-depth understanding of the accounts of PIA Corporation Limited (PIACL) after its restructuring in which Rs660 billion worth of debt was taken out of the company books. "Despite the overhaul, PIACL Core still reported a pre-tax loss of Rs4.6 billion for the full year and Rs2.3 billion over six months," said the Ministry of Finance. Three months ago, every high-up from Defence Minister Khawaja Asif to Prime Minister Shehbaz Sharif showed satisfaction with PIA's profit of Rs26 billion without knowing that it was a mere "accounting profit". The finance ministry's report stated that a one-off deferred tax asset (DTA) recognition of approximately Rs30 billion was booked as part of the restructuring. While this resulted in an "accounting profit", it is important to recognise that this is a non-cash adjustment, stated the ministry while correcting the record. The report stated "excluding the DTA, the airline's net loss before tax stands at Rs4.58 billion for 12 months," ending December. This DTA reflects the company's expectation of future taxable profits, which is itself a vote of confidence in the potential recovery path, but it should not be misinterpreted as a sign of operational profitability, said the ministry. "The CMU has, therefore, highlighted this so that future valuations consider these items". Accounting rules permit the DTA recognition where sufficient future taxable profits are probable, enabling to offset the accumulated tax losses. "The deferred tax asset of Rs30 billion represents a future tax shield and should not be considered part of core profitability," said CMU Director General Majid Soofi. But the CMU has plainly said that "the profit figures are essentially impacted by deferred tax reversals, impacting the effective tax rate and earnings quality". The report stated that a significant outcome of the restructuring was the dramatic reduction in long-term financing liabilities, from over Rs295 billion to just Rs13 billion, including lease obligations. Consequently, the finance cost plunged from Rs79 billion to Rs10 billion. The cost of services remains elevated and total operational costs reached Rs106.6 billion. "To mitigate these pressures, PIACL must aggressively pursue fleet modernisation, enter fuel hedging contracts and renegotiate existing supply agreements," the CMU recommended. It added that Rs8.3 billion in administrative cost and another Rs8.2 billion in distribution cost were high. PIACL also incurred exchange losses of Rs2.3 billion, reflecting unhedged exposure to foreign currencies that is a structural vulnerability for any international airline. The finance ministry said that following delisting from the Pakistan Stock Exchange and full government ownership of PIA via Holding Company, PIACL "is now free from short-term market pressures". But it said that a performance-based human resources model must be introduced, along with international productivity benchmarks and merit-based promotions. The ministry stated that PIA and Pakistan Telecommunication Company Limited (PTCL) also posed major risks. PIA's heavy debt despite debt being carved out increases insolvency risks, requiring urgent restructuring and potential strategic partnerships. "Rapid privatisation should be ensured," it said. After the failure of the first attempt, for the second attempt to privatise PIA, the Privatisation Commission has pre-qualified four parties and three of them are cement makers. The finance ministry said that PIA and PTCL face market pressures and operational inefficiencies. Debt restructuring, operational improvements and reduced leverage through asset sales are key measures to regain financial health and reduce their dependence on the government, it recommended. PIA is among the entities that face undue interference. It has also been placed among the entities that have low compliance with the SOEs Act, falling even below 60% threshold. To address these challenges, strategic mandates of SOEs must be clearly recalibrated and aligned with national economic goals and fiscal discipline. Long-term business plans that incorporate measurable stakeholder-aligned objectives must be institutionalised, particularly for high loss-making entities like power distribution companies, Railways, and PIA, stated the report. It added that the restructuring of PIACL marks a turning point in the airline's decades-long struggle with debt and inefficiency. Through the successful implementation of the Scheme of Arrangement (SOA), the airline has shed legacy debt and non-core assets, emerging as a streamlined, aviation-focused entity. This strategic realignment allows the company to shift from financial firefighting to operational revitalisation. The government has parked Rs660 billion worth of PIA debt in a new holding company along with non-core real estate assets, which substantially cleaned up the balance sheet. With this separation, PIACL now operates as a focused airline business, while PIA Holding Company takes on the responsibility of settling historical obligations through budgetary support and asset monetisation. This structure enables clearer financial reporting and makes future privatisation or partnerships more feasible. Post-restructuring, PIACL's total assets are recorded at Rs187 billion after accounting adjustments. The company's current liabilities have declined from Rs482 billion to Rs142 billion and non-current liabilities from Rs366 billion to Rs41 billion. These carve-outs have eliminated the suffocating debt overhang and improved solvency metrics, offering much-needed breathing space for strategic decision-making, according to the report.
Business Recorder
3 hours ago
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Discos' sell off: ‘Turkish model' under consideration
ISLAMABAD: Pakistan is dispatching a delegation to Turkiye to study its model for the privatisation of power distribution companies (Discos), aiming to reduce losses, attract investment, and improve operational efficiency, well-informed sources told Business Recorder. In the first phase, the government is fast-tracking efforts to privatise three Discos— Islamabad Electric Supply Company (IESCO), Gujranwala Electric Power Company (GEPCO), and Faisalabad Electric Supply Company (FESCO) — with the goal of completing the process by the end of 2025. The plan involves engaging transaction advisors for long-term concessions, potentially adopting the Turkish model, which has demonstrated notable improvements in private sector participation, service quality, and loss reduction in Turkiye. In the second phase, Lahore Electric Supply Company (LESCO), Multan Electric Power Company (MEPCO), and Hazara Electric Supply Company (HAZECO) will be offered for privatisation. Meanwhile, Hyderabad Electric Supply Company (HESCO), Sukkur Electric Power Company (SEPCO), and Peshawar Electric Supply Company (PESCO) will be offered under a concessional model. The Tribal Areas Electric Supply Company (TESCO) and Quetta Electric Supply Company (QESCO) will be retained for improvement and later offered through management contracts. Discos' sell-off/provincialisation: PMO directs Power Div. to expedite consultations At a recent meeting, Prime Minister Shehbaz Sharif directed the Power Division to invite a Turkish delegation to Pakistan for follow-up discussions after the completion of the Pakistani delegation's visit to Turkiye. The sources said, FAs shared update on following Condition Precedents (CPs): (i) notify licence eligibility criteria rules; (ii) notify licence eligibility regulations; (iii) notify separate performance standards for distribution and supply (from existing standards); (iv) notify power acquisition/ power procurement regulations applicable to suppliers; (v) modify and notify tariff rules to address uniform tariff; (vi) modify current tariff guidelines to accommodate distribution licencee and supplier of last resort; (vii) clarify subsidies for Nepra consideration and in notifying tariffs; (viii) notify guidelines on how Discos can request and recover subsidies; (ix) clean up Discos' balance sheets; (x) complete the process for issuance of shares in Discos; (xi) develop future mechanism for timely payments against government dues (TDS, FATA/ AJK, etc); (xii) as per requirement of National Electricity Policy (NEP), efficient tariff structures for Discos may be awarded and Discos target may be revisited as stated in NEP; (xiii) as per requirement of NEP, the strategic road maps entailing commercial performance milestones may be developed for each Disco; (xiv) as per NEP, the anti-theft initiatives and recovery systems may be institutionalized in each Disco with support of law enforcement agencies and provincial governments; (xv) there are various off-balance sheet liabilities of Discos which need to be recognised as per applicable financial and corporate reporting legal requirements; (xvi) define eligibility criteria for customers who can choose their supplier; (xvii) licence regime of Discos is due to be changed after expiry of their existing validity till 2022 safeguarding the wire and retail business of Discos; (xviii) CTBCM is due to be effective soon impacting the exclusivity of Discos in their existing service jurisdictions; and (xix) a confirmed timeline may be provided for full implementation of CTBCM. 'The work of privatisation is going on and our Advisor, Alvarez & Marsal Middle East, has given the sectoral due diligence report which is being reviewed by Power Division, Petroleum Division, along with Nepra and CPPA-G. There are number of regulatory and policy issues that need to be sorted out so that there is no issue at a later stage. So, the Working Group and all these people are working on it very closely. At the same time, due diligence is also progressing,' said a senior official of Privatisation Commission. A couple of weeks ago, Power Division has also given a detailed briefing to the representatives of development partners including the World Bank on the updated status of privatisation of Discos. According to sources, development partners have been informed that Privatisation Commission is on track on the privatisation process of three Discos in first phase. According to a Finance Ministry's Report of first half of FY 2025, some Discos have posted huge financial losses. Quetta Electric Supply Company and Sukkur Electric Power Company had losses of Rs58.1 billion and Rs29.6 billion, respectively, with accumulated losses of Rs770.6 billion and Rs473.0 billion, underscoring chronic inefficiencies and poor recoveries in the distribution segment. Peshawar Electric Supply Company with Rs19.7 billion loss (Rs684.9 billion accumulated) The total core operating actual loss for the period stands at Rs283.7 billion, with notable contributors including Qesco Limited (Rs92.65 billion loss), Pesco Limited (Rs53.68 billion), and Hyderabad Electric Supply Company (Hesco) Limited (Rs39.63 billion). Even Discos with positive Earnings Before Interest and Taxes (EBIT) and subsidy removal—such as Multan (EBIT Rs8.4 billion), Faisalabad (Rs52 billion), and Gujranwala (Rs20.9 billion)—turned loss-making after adjusting for subsidies, incurring actual losses of Rs35.17 billion, Rs13.12 billion, and Rs7.32 billion, respectively. Lahore, Islamabad, Sukkur, and Tribal Discos also showed EBIT gains or marginal losses but failed to stay profitable post-adjustments. Particularly, alarming is Quetta DISCO, with an EBIT loss of Rs60.36 billion and additional subsidies of Rs 32.30 billion still leaving a staggering net loss. Copyright Business Recorder, 2025
Business Recorder
3 hours ago
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202 female computer teachers under FDE jobless
ISLAMABAD: Around 202 female computer teachers working in girls' schools and colleges under Federal Directorate of Education (FDE) have been rendered jobless after the completion of a project, it was learnt on Saturday. The computer learning project was started during the last PML-N tenure of ex-PM Nawaz Sharif. According to the official notification available with Business Recorder, the Universal Service Fund's computer labs project, which aimed to provide Information Technology (IT) education to girls, officially ended on June 30, 2025, terminating the teachers' contracts. The affected teachers have appealed to Prime Minister Shehbaz Sharif for extending job contract or employment on a regular basis. They recounted their successful contributions to the project and seek urgent intervention to resolve the matter on humanitarian grounds. The 202 teachers were hired to enhance digital literacy in Islamabad's schools and colleges. The notification states that decision has been conveyed to the concerned teachers with appreciations and best wishes for their priceless contribution to successfully complete project titled 'Sustainability of Computer Labs' established by the Universal Service Fund. 'As the said project has now been successfully completed on 30.06.2025, the requirement for teaching services under this initiative has ceased. Accordingly, the services of the teachers engaged under this project will no longer be required with effect from 01.07.2025,' notification further stated. Copyright Business Recorder, 2025
