10 power distribution companies likely to be transferred to president

The World Bank has proposed transferring the ownership of 10 power distribution companies (DISCOs) to the president of Pakistan before their privatisation.

According to reports, Power Division officials, during a meeting of the Senate Standing Committee on Privatisation, revealed that the World Bank had outlined at least nine conditions for DISCO privatisation, of which only two had been met so far.

The recommendations include notifying tariff rules, clarifying subsidies and revising eligibility criteria for licenses.

The global lender has also emphasised cleaning up DISCOs’ balance sheets, recognising liabilities and implementing a clear electricity policy to define roles and responsibilities aimed at reducing technical and commercial losses.

Officials expressed optimism that the remaining seven conditions would be met by January 2025.  
The privatisation process is backed by the World Bank under its Non-Lending Technical Assistance programme. 

However, Federal Minister for Privatisation Abdul Aleem Khan stressed that unresolved legacy issues and off-balance sheet liabilities must be addressed before moving forward.  

The additional secretary of the Power Division disclosed that the government’s uniform tariff policy would remain intact even after privatisation.

This means consumers in efficient regions, like Punjab, will continue subsidising those in areas with higher line losses, such as Sindh and Balochistan. Furthermore, the government will maintain subsidies for privatised companies, keeping the budget under strain.  

In August, the cabinet had approved a phased privatisation plan for DISCOs. In the first phase, profitable entities such as Islamabad Electric Supply Company (IESCO), Faisalabad Electric Supply Company (FESCO) and Gujranwala Electric Power Company (GEPCO) will be sold outright. 

The second phase will include loss-making entities like Lahore Electric Supply Company (LESCO), Multan Electric Power Company (MEPCO) and Hazara Electric Supply Company, while the highest loss-making firms such as Hyderabad and Peshawar DISCOs, will be offered under long-term concession agreements.