Privatisation of Discos: NA panel raises objection to selection criteria

KARACHI: The National Assembly’s Standing Committee on Economic Affairs Division raised serious objections on Wednesday to the selection criteria for the privatisation of power distribution companies, stating that Discos with “minimal transmission and distribution losses for privatisation” were currently being targeted.

Pakistan government plans to sell loss-making, state-owned Discos, starting from Islamabad Electric Supply Company (IESCO), Gujranwala Electric Power Company (GEPCO), and Faisalabad Electric Supply Company (FESCO). It has also appointed a financial advisor for privatisation of the three electricity distribution companies.

The committee meeting convened on Wednesday under the chairmanship of Muhammad Atif at Parliament House, Islamabad.

“The committee thoroughly examined the proposed privatisation of three power distribution companies - Islamabad Electric Supply Company, Gujranwala Electric Power Company, and Faisalabad Electric Supply Company - raising serious objections to the current selection criteria,” the NA Secretariat said on Wednesday.

“Members unanimously expressed concerns to the methodology that exclusively targets Discos with minimal transmission and distribution losses for privatisation.”

The committee emphasised that by limiting privatisation to only the most efficient utilities, the government would be compelled to retain chronically underperforming Discos, thereby exacerbating existing operational challenges and making their eventual privatisation virtually unattainable.

Meanwhile, the Power Division in the Wednesday meeting presented an overview of Pakistan’s current power generation capacity to the Standing Committee, reporting a total installed capacity of 39,952 megawatts (MW).

“The energy mix analysis revealed a concerning imbalance, with fossil fuel-based generation accounting for 54% compared to just 46% from clean energy sources,” the NA statement read.

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The committee was informed that Pakistan’s power sector was facing a significant surplus of approximately 7,000 to 8,000 MW in electricity generation capacity.

“Members expressed serious concern over the substantial financial burden imposed by capacity payments for this unused electricity, which continues to strain the national exchequer despite serving no practical purpose.”

With its plan to privatise a number of state-owned entities, the government missed a modest target of collecting Rs30 billion (later revised to Rs8 billion) through privatisation proceeds in the financial year 2024-25.

For the current fiscal year (FY26), the government has budgeted Rs86.550 billion collection from privatisation proceeds.