ISLAMABAD: The caretaker government has reportedly refused to appoint International Finance Corporation (IFC) as the Transaction Advisor of privatisation of power Distribution Companies (Discos), well informed sources told Business Recorder.
IFC, an arm of World Bank had been engaged with the Privatisation Commission and Power Division since long and presented a number of proposals with respect to Discos future, the sources added.
The proposal to hire the services of IFC as the Transaction Advisor on long-term concession agreements of Discos was placed before the Cabinet Committee on Privatisation (CCoP) but did not sail through due to difference of opinion amongst the stakeholders.
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The sources said, CCoP approved adoption of long-term concession model for private sector participation in the two Discos namely, Gujranwala Electric Power Company (GEPCO) and Hyderabad Electric Supply Company (HESCO) on the principle of one profit making and one loss making entity to be offered jointly to the investors.
According to sources, it was also decided that the previous decision of Federal Cabinet to provincialize the Discos shall be annulled and remaining Discos shall remain on the privatisation list.
The CCoP has directed Privatisation Commission to lead the process, of offering the Discos through long- term concession with support from Power Division as per provisions of Section 25 of the Privatisation Commission Ordinance, 2000;
The caretaker government has also directed Power Division to submit the case to the Federal Cabinet for bifurcation of two Discos, namely Lahore Electric Supply Company (LESCO) and Multan Electric Power Company (MEPCO) , with no increase in the existing human resource of the proposed Discos after bifurcation.
The caretaker government, however, did not approve constitution of Ministerial Steering Committee, as proposed in the summary.
The caretaker government has also approved constitution of Technical Working Group, with composition to be determined by Minister for Privatisation, in consultation with Minister for Energy, which will assist Privatisation Commission in expediting the process and look after the technical requirement during the transaction;
The sources said, CCoP has directed Privatisation Commission to hire Financial Adviser as per provisions of Privatisation Commission Ordinance 2000 and the rules framed there under.
The Action Plan as proposed in the summary would be considered separately and will be approved after due diligences by the Privatisation Commission, the sources continued.
The sources said the Federal Cabinet in its meeting held on February 9, 2024 did not ratify the minutes of CCoP of February 7, 2024 due to differences amongst the Ministries. However, later on these minutes were ratified.
Copyright Business Recorder, 2024
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