Islamabad — With crucial economic review talks with the IMF approaching, the government is under pressure regarding the privatization of power distribution companies (DISCOs), while the National Assembly’s Standing Committee on Economic Affairs has already expressed serious reservations over the process.
In a previous session Chaired by Chairman Muhammad Atif, the committee strongly criticized the government, stating that only profit making companies , Islamabad Electric Supply Company (IESCO), Gujranwala Electric Power Company (GEPCO), and Faisalabad Electric Supply Company (FESCO) are being selected for privatization, while the loss making companies will remain under government control.Members argued that this policy will further exacerbate financial & administrative problems and make it impossible to privatize loss incurring companies in the future.
Briefing the committee, officials informed that currently, 54% of the country’s electricity is generated from conventional fuels, while 46% comes from clean energy.Despite this, Pakistan has an additional power generation capacity of 7,000 to 8,000 megawatts, which remains unused, forcing the government to make hefty capacity payments.
From a financial perspective, the government failed to achieve its revised privatization target of 8 billion rupees in the fiscal year 2024-25.For the ongoing fiscal year 2025-26, a new target of 86.55 billion rupees has been set.However, sources say that due to the incomplete privatization policy action plan and other reforms, meeting this target will be difficult.
Under the IMF’s prescribed benchmarks, the government is working on amendments to the Public Finance Management Act and reforms for transparency and accountability, but progress remains sluggish.During the IMF’s second economic review talks from September 25 to October 8, progress on DISCOs privatization and the policy action plan will be a key agenda item, while discussions on these reforms will be crucial for the release of the next tranche exceeding one billion dollars.