The government has decided to privatise three power distribution companies (DISCOs)—Islamabad Electric Supply Company (IESCO), Faisalabad Electric Supply Company (FESCO), and Gujranwala Electric Power Company Limited (GEPCO)—in the first phase, Secretary of the Power Division Dr. Fakhre Alam informed the Senate Standing Committee on Power.
The Senate Standing Committee on Power, chaired by Senator Mohsin Aziz, was briefed on the ongoing preparations for the privatization of power distribution companies (DISCOs). The Secretary Power Division apprised the committee that steps are underway to clear the balance sheets of DISCOs, transfer their properties to their names, and shift their shares from WAPDA to the government.
“In the first phase, the privatisation of IESCO, FESCO, and GEPCO will be undertaken,” he said.
Dr. Alam stated, “I have written letters to the provincial chief secretaries offering them the option to purchase DISCOs in their respective provinces, but I have not received any response, which indicates they are not interested in purchasing them.”
He revealed that starting this year, the private sector will be allowed to participate in the electricity trading system. Private entities will have the option to purchase more than one megawatt of electricity from sources of their choice.
The Privatization Commission will appoint financial advisors for DISCOs within this month. These advisors will evaluate the companies’ worth within 45 days.
The secretary highlighted that DISCOs currently have 185,000 sanctioned positions, of which 85,000 are vacant, suggesting the existing staff is likely to be retained post-privatization.
Secretary Alam also noted that the performance of DISCOs has improved with the appointment of new boards. Bill recovery rates have reached 95%.
However, Senator Aslam Abro questioned why new boards have not been constituted for HESCO and SEPCO, accusing the current boards of attempting to appoint their preferred candidates as CEOs. The committee directed the Power Division to appoint new boards for these companies within a month and halted the implementation of decisions made by the existing boards.
Dr. Alam announced plans to reduce electricity tariffs by Rs. 10–12 per unit by June next year. To date, the industrial tariff has already been reduced by Rs. 11 per unit and domestic tariffs by Rs. 5 per unit. Five IPPs have been shut down, and tariff incentives for eight bagasse-based plants have been eliminated, replacing them with imported coal tariffs, benefiting consumers by Rs. 70 billion annually.
Additionally, new agreements with 15 IPPs were approved last week, introducing a partial capacity payment model linked to electricity usage, resulting in annual savings of Rs. 37 billion. Future phases will focus on revising tariffs for government-owned power plants.
The Senate committee meeting also addressed a public petition filed by the General Secretary of the All Pakistan NTDC Engineering Association (APNEA) regarding the government’s steps for winding up or trifurcating NTDC into smaller units.
The Secretary of the Ministry of Power explained the restructuring plan to make NTDC smarter and more efficient. He added that NTDC engineers will remain within the National Grid Company, overseeing internal operations, while project execution and energy infrastructure development will be managed by a separate government-approved company.
During the meeting, Senator Mohsin Aziz questioned the benefits of separating WAPDA, pointing out that consumers have not seen tangible improvements.
The Secretary of the Ministry of Power responded that while generation without transmission is a challenge, it is not the sole issue. Committee members, concerned about electricity costs, recommended a briefing by WAPDA on its future direction.
The Secretary of the Ministry of Power also reported that discussions with five IPPs concluded, and operations were halted as of September 30. One IPP was transferred to government ownership, while the remaining four were shut down.
The committee was also updated that bagasse had been aligned with imported coal due to the absence of a notified price, and dollar indexation mechanisms were eliminated. A fixed price of Rs. 4,000 per 100 units of bagasse was set. Senator Mohsin Aziz suggested that details on the remaining projects be provided at the next meeting.
Further, Senator Aziz raised concerns about privatization’s impact on efficiency, to which the Secretary confirmed the privatization of better-performing entities, such as IESCO, FESCO, and GEPCO. Improvements in recovery rates and loss reductions were noted, with further steps pending the financial advisors’ analysis.
The committee also discussed CEO and management appointments in DISCOs, noting that there is no specific age limit. The Secretary confirmed that the boards had been informed of the end of their tenures and that a new board is being appointed.
The committee recommended a one-month timeframe for these appointments. Senator Aziz also requested a report on the SEPCO Executive Engineer’s removal due to corruption, seeking details of the recommendation within 15 days.
The meeting was attended by Senators Rahat Jamali, Manzoor Ahmed, Muhammad Aslam Abro, Shibli Faraz, the Secretary and Additional Secretary of the Ministry of Power, along with senior officials from relevant departments.
