Railways financial crisis deepens as losses rise 19%

ISLAMABAD: Pakistan Railways has posted a net loss exceeding Rs 61 billion in the fiscal year 2024–25, reflecting a continued deterioration in its financial health, according to the latest audit report issued by the Auditor General of Pakistan.

The loss marks an increase of around Rs9 billion, or 19.11%, compared to the previous fiscal year, underscoring a worsening gap between revenues and operational expenditures within the state-owned enterprise.

The audit report revealed that Pakistan Railways recorded an operating loss of Rs60 billion during the year, while its operating loss ratio rose to 65%, indicating mounting concerns over financial sustainability and efficiency.

Over the past five years, financial indicators show a consistent upward trend in losses. In FY 2024–25, the organisation generated Rs92.7 billion in revenue against total operating expenses of approximately Rs153 billion, further widening the deficit.

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The report noted that operating costs surged by about 60% between FY 2020–21 and FY 2024–25, while overall operational losses increased by 29%, reflecting limited progress in achieving financial stability despite ongoing reform efforts.

A performance audit covering 84 out of 160 formations of Pakistan Railways reviewed Rs105.6 billion in expenditures and Rs84.25 billion in receipts. Auditors identified irregularities amounting to Rs34.42 billion during the review.

These included Rs24.6 billion in budget-related discrepancies, Rs11.2 billion linked to weak financial controls, and Rs7.2 billion arising from project management inefficiencies, along with further issues in land, asset, and inventory management.

The report also flagged poor utilisation of public assets. Despite holding total assets worth Rs515.33 billion, Pakistan Railways failed to improve its revenue reserves, which remained stagnant at Rs26.05 billion for the second consecutive year.

The findings highlight ongoing challenges in generating retained earnings and raise serious questions about long-term financial viability.