ISLAMABAD: Pakistan Agricultural Storage and Services Corporation (PASSCO) faced a massive net loss of Rs20 billion in FY2024-25 and a severely negative net loss margin of -33.1 percent, the AGP’s latest report unfolds.
The extensive financial collapse of the state-owned enterprise is further underscored by a surge in cumulative losses to Rs21,340.11 million for the 2021-2025 period, alongside a prolonged non-recovery of Rs257.128 billion from various government agencies.
This steep downfall follows a period where PASSCO’s profitability rapidly eroded from Rs3,942 million in 2021 to just Rs419 million in 2023, before plunging into its current multi-billion rupee deficit.
According to the AGP’s report, the organisation’s core financial and operational indicators show severe deterioration: Net Loss (FY2025) Rs20,478 million, Net Loss Margin -33.1%- meaning the corporation loses about Rs33 for every Rs100 earned, four-year cumulative (2021-25) loss Rs21,340.11 million, outstanding government receivables Rs257.128 billion, misappropriation/ unrecovered fraud Rs62.055 million in confirmed wheat misappropriation at PC/RV Lasharian and Tandlianwala, which includes a specific case where an official was permitted a lenient installment plan of just Rs36,079 per month to cover a Rs20.65 million loss, effectively stretching the recovery timeline across nearly 48 years.
The data further reveals historical profit decline from Rs3,942 million (2021) to Rs419 million (2023). Current Ratio Decline fell from 1.30 in FY2021 to 0.99 in FY2025, dropping below the safe operating threshold. Quick Ratio Deterioration declined from 1.11 in FY2021 to 0.52 in FY2025, whereas Net Working Capital shifted from a positive Rs18.45 billion in FY2021 to a negative Rs-1.9 billion by FY2025, Debt-to-Equity ratio skyrocketed from 3.1 times in FY2021 to 19.0 times in FY2025.
Further, Debt-to-Assets ratio rose from 0.71 in FY2021 to 0.97 in FY2025, meaning 97% of the corporation’s assets are currently financed by debt. Inventory Holding Period blew out from 62 days in FY2021 to 1,388 days in FY2025. The audit report attributes this severe capital structure collapse to a total dependency on high-cost commercial borrowing, weak treasury practices and flawed KIBOR rate selections that heavily inflated finance costs.
Beyond purely macroeconomic pressures, widespread governance failures crippled day-to-day operations. Auditors observed that PASSCO management bypassed its own Board of Directors to circulate and execute an unapproved Wheat Procurement Policy in 2024.
This policy introduced unauthorised intermediaries (“Arhties”) who manipulated the market by acquiring distribution bags (bardana) and reselling them at a premium of Rs1,000 to Rs1,500 each, exploiting local growers. An Intelligence Bureau investigation subsequently confirmed that 247 employees were linked to these illicit malpractices. The corporation’s internal checks and balances similarly failed to perform.
The internal Vigilance Cell remained entirely silent on the illegal sale of bardana, while regional godowns in prime industrial areas were left completely vacant and unmonetized rather than rented out for revenue. On the digital front, the total absence of an Enterprise Resource Planning (ERP) platform or automated dashboard tools meant that operational irregularities went undetected due to a reliance on fragmented manual processes.
To arrest the decline, the audit recommends urgent structural reforms, including a strict mandate requiring board approval for all operational policies, a complete overhaul and digitization of the internal Vigilance Wing, and immediate legal steps to recover outstanding overbilled government claims and employee-driven losses.
