ISLAMABAD: The privatisation of Pakistan’s state-run power distribution companies (DISCOs) is gaining traction as 9 to 10 Independent Power Producers (IPPs) have shown interest in acquiring these assets, according to a news report. Â
During a meeting of the Senate Standing Committee on Privatisation, Secretary of the Privatisation Commission Usman Akhtar Bajwa confirmed that the government plans to sell between 51% and 100% of DISCO assets, with three companies—Islamabad Electric Supply Company (Iesco), Gujranwala Electric Power Company (Gepco), and Faisalabad Electric Supply Company (Fesco)—set to be privatised between January and June of the current fiscal year.
Bajwa highlighted challenges faced by DISCOs, including difficulties in asset transfers, ownership of grid stations, and recovery of dues from government departments. Other concerns include issues with regulatory frameworks, payments to government entities, and pension liabilities.
Currently, 24 state-owned enterprises, including 11 loss-making DISCOs, are on the active privatisation list. These DISCOs own 1,416 properties nationwide.
A senior joint secretary from the Power Division told the committee that 162 of the 450 properties belonging to Iesco, Gepco, and Fesco are in the process of being transferred to their names to facilitate the sale. These properties were previously under the names of provincial governments, Wapda, or cantonment boards.
The committee was told that efforts were underway to resolve legal issues related to the privatisation, with discussions focusing on the liberalisation of the electricity market. The government aims to gradually transition from a centralised model to one with multiple buyers and sellers over the next four to five years.
Meanwhile, the committee discussed the financial challenges facing Zarai Taraqiati Bank Limited (ZTBL), which has accumulated Rs80 billion in bad loans, nearly equal to its equity of Rs88 billion.Â
The bank’s president stated that defaults had reached Rs100 billion in June 2023 but had reduced due to aggressive recovery efforts. Despite this, ZTBL posted Rs42 billion in pre-tax profits over the past two years and paid Rs19 billion in taxes. Bajwa indicated that the privatization of ZTBL could take up to nine months.
The committee also reviewed the Petroleum Division’s proposal to include the Pakistan Mineral Development Corporation (PMDC) in the privatisation list, though the idea faced opposition from lawmakers concerned about selling strategic or profitable entities.