Govt decides to sell off Lesco, Mepco in their existing form

ISLAMABAD: The Ministry of Privatisation (MoP) has decided to privatise two of the country’s largest area-wise power Distribution Companies (DISCOs) — Lahore Electric Supply Company (LESCO) and Multan Electric Power Company (MEPCO) — in their existing form instead of bifurcating them into smaller entities, well-informed sources told Business Recorder.

The decision follows deliberations by a Technical Committee constituted by the Privatisation Commission (PC) to examine the feasibility of dividing LESCO and MEPCO into two or three smaller DISCOs before their privatisation.

The committee concluded that both companies should be privatised in their present status, as any bifurcation would delay the privatisation process, according to an official familiar with the matter.

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The Technical Committee comprised Sajid Akram, Advisor (Power), Privatisation Commission, as Chairman; Ghulam Rasool, Joint Secretary (Privatisation), Power Division; Imran Hafeez, Additional Director (Tariff), National Electric Power Regulatory Authority (NEPRA); and Abid Lodhi, Managing Director, Power Planning and Monitoring Company (PPMC).

The committee was tasked with evaluating the feasibility of bifurcating LESCO and MEPCO into smaller companies, analysing the strategic advantages and disadvantages of such restructuring in the context of the National Electricity Plan, Power Policy and ongoing privatisation programme and reviewing whether any similar committee had previously been constituted and its recommendations.

Meanwhile, the Privatisation Commission has decided to hire a Financial Adviser to provide financial advisory services for private-sector participation in LESCO and MEPCO.

The PC has invited interested parties, either individually or as consortiums, with relevant experience in undertaking similar transactions to participate in the process. The Request for Proposal (RFP) package, containing detailed terms of reference, evaluation criteria and draft Financial Adviser Services Agreement (FASA), has been made available through the Privatisation Commission.

The decision to retain both companies in their existing form is significant as LESCO and MEPCO have among the largest service areas and consumer bases in the country’s distribution sector.

MEPCO, incorporated in 1998, is owned by the federal government through the Ministry of Energy and operates under a permanent distribution licence issued by NEPRA. It provides electricity to 13 administrative districts of southern Punjab.

MEPCO is the country’s largest power distribution company in terms of consumer base, serving approximately 8.76 million consumers. Its network comprises more than 82,000 kilometres of distribution lines and over 780 grid stations, covering areas bordering three provinces and multiple DISCOs.

LESCO, which commenced operations as a public limited company in July 1998, serves around 7.05 million consumers in Lahore and adjoining districts, including Kasur, Sheikhupura, Nankana Sahib and Okara.

Its operational structure comprises eight operation circles headed by Superintending Engineers and 41 divisions managed by Executive Engineers.

Both companies have been facing performance challenges, particularly in the areas of electricity theft, line losses and recoveries, with their performance remaining comparatively weaker than some other Punjab-based DISCOs.

LESCO has been pursuing system modernisation, including the installation of Advanced Metering Infrastructure (AMI) and digital billing, with a target of converting its consumer base to smart metering by 2029. However, shortages of transformers and meters have affected new connections and replacement of faulty equipment.

MEPCO has also been focusing on grid modernisation, AMI deployment and digital billing to improve transparency, recoveries and customer services.

According to audits for FY2024-25, the overall performance of both DISCOs remained unsatisfactory, adding to the challenges confronting the government as it moves ahead with their privatisation.

The decision to proceed with the two companies in their present form is expected to enable the government to avoid the additional time and administrative complications associated with restructuring them before launching the transactions.

Copyright Business Recorder, 2026