The National Highway Authority (NHA) has accumulated losses exceeding Rs. 2.06 trillion by the end of FY2024-25, after recording net operational deficits for 10 consecutive years, according to the latest audit report issued by the Auditor General of Pakistan.
The audit paints a concerning picture of the authority’s financial health, citing structural inefficiencies, rising debt obligations, and a persistent gap between revenue and expenditure as the primary reasons behind the growing losses.
According to the audited financial statements, the NHA posted annual post-tax deficits throughout the past decade. The deficit stood at Rs. 157.37 billion in FY2015-16 and continued to fluctuate before reaching Rs. 288.54 billion in FY2024-25. The highest annual loss was recorded in FY2022-23 at Rs. 413.45 billion.
The report noted that operating expenses have consistently outpaced revenue growth due to increasing administrative costs and the expanding maintenance requirements of Pakistan’s national highway network.
Despite a steady increase in income, key financial performance indicators remained in negative territory. The authority’s net profit ratio improved slightly from minus 327.93 percent in FY2023-24 to minus 236.47 percent in FY2024-25. Similarly, return on assets remained negative at minus 5 percent, while return on capital employed stood at minus 2.40 percent during the latest fiscal year.
The audit highlighted that NHA’s total revenue increased significantly over the past decade, rising from Rs. 28.12 billion in FY2015-16 to Rs. 122.02 billion in FY2024-25. The growth was mainly driven by higher motorway toll rates, expansion of the road network, and the implementation of the M-Tag electronic toll collection system.
Toll collections alone nearly doubled during the year, increasing from Rs. 32.10 billion in FY2023-24 to Rs. 64.42 billion in FY2024-25, accounting for more than half of the authority’s total revenue. However, revenue generated through right-of-way leases remained relatively low at Rs. 3.78 billion, with the audit attributing the underperformance to delayed GIS surveys and unresolved leasing issues.
Despite higher revenues, the authority continued to face severe liquidity challenges. Current liabilities surged from Rs. 706 billion in FY2015-16 to Rs. 2.03 trillion by FY2024-25, while current assets increased only modestly from Rs. 138 billion to Rs. 215 billion over the same period.
As a result, the NHA’s current ratio and quick ratio remained at just 0.11, indicating limited capacity to meet short-term financial obligations without external support.
As of June 30, 2025, the authority reported total assets of Rs. 5.83 trillion, including Rs. 5.61 trillion in long-term assets. Total liabilities stood at Rs. 3.87 trillion, while total equity reached Rs. 1.96 trillion after accounting for the revaluation surplus of property, plant, and equipment.
The audit further revealed that the NHA’s overall debt burden had climbed to Rs. 3.76 trillion, including Rs. 555.39 billion in current liabilities related to maturing long-term loans and Rs. 1.80 trillion in non-current borrowings.
A review of the authority’s cash flows showed that financing activities generated Rs. 160.88 billion during FY2024-25, while operating and investment activities recorded net outflows of Rs. 21.03 billion and Rs. 130.23 billion, respectively. Over the past decade, cash balances increased only marginally, reflecting an annual growth rate of just 1.7 percent.
The audit also highlighted declining operational efficiency. Debtor recovery periods increased substantially over the years, reaching 221 days in FY2024-25, while creditor payment periods fell sharply to two days, indicating that supplier payments were largely being financed through borrowings.
Although the statutory audit issued an unqualified opinion, it included an Emphasis of Matter regarding significant ongoing litigation that could expose the authority to substantial financial liabilities.
These legal disputes include land acquisition claims worth Rs. 114.5 billion, contractor claims totaling Rs. 254.25 billion, and right-of-way lease disputes amounting to Rs. 3.42 billion.
The Auditor General concluded that weak legal representation, delayed responses to litigation, and repeated adverse arbitration decisions have increased the authority’s financial exposure, further raising concerns over the NHA’s long-term debt sustainability and overall financial stability.
