Blackouts and broken promises: lessons from KE’s privatisation — II

Lessons and way forward

The bottom line for consumers is that privatisation did not deliver reliable power, reasonable rates, or responsible management. Instead, they have faced many of the same issues that plague public utilities — load shedding, line losses, billing disputes — plus new frustrations like feeling powerless against a monopoly.

This experience holds important lessons for the wider power sector privatization agenda. As the government prepares to offload FESCO, GEPCO, IESCO and others from its portfolio, that the country cannot afford to repeat. To ensure that future transactions genuinely serve consumers and the economy, the following safeguards must be made non-negotiable in all upcoming privatization deals:

Blackouts and broken promises: lessons from KE’s privatisation — I

1. Robust Service-Level Agreements (SLAs): Contracts must specify maximum allowable outage hours per feeder and include automatic, pre-specified financial penalties that bite—not token fines that become a cost of doing business.

2. Smart Metering Enforcement: Advanced metering infrastructure should be deployed to its full potential. Delinquent connections must be isolated at the sub-feeder level, ensuring compliant consumers never suffer for others’ theft or nonpayment.

3. Automatic Profit Rebates: Tariff structures must embed an automatic “claw-back” mechanism, with rebate payments to consumers triggered immediately once earnings thresholds are breached—delay through litigation must be disallowed.

4. Safety and Infrastructure Mandates: Investment commitments for line insulation, transformer replacements and real-time network monitoring must be mandatory, audited by third parties and published publicly every quarter.

5. Independent Oversight Body: Beyond Nepra, an independent “Power Service Commission” — with equal representation from federal, provincial and consumer bodies—should have authority to review SLAs, impose penalties, and even revoke licenses in extreme cases.

6. Consumer Grievance Escalation Path: A transparent, tiered complaints process—culminating in a binding arbitration panel—will give consumers and businesses a credible avenue to resolve billing or service disputes without endless bureaucratic delay.

If these mechanisms are not embedded from the outset, Pakistan risks entrenching private monopolies that are just as opaque and unaccountable as the public ones they replace, only with even fewer tools for course correction.

The next phase of privatization must not merely change ownership, it should rewrite the rules of engagement between utilities and the people they serve. Anything less will repeat the same mistakes, at a much higher cost.

(Concluded)

Copyright Business Recorder, 2025