The Senate Standing Committee on Privatization was informed on Friday that the major objective of the Ministry of Power behind the privatization of distribution companies (DISCOs) was to reduce transmission losses and improve the quality of service delivery.
The meeting of the Senate Standing Committee on Privatization was held at the Parliament House with Senator Shamim Afridi in the Chair.
The meeting commenced with deliberations on the privatization of Peshawar Electric Supply Company Limited (PESCO) and Islamabad Electric Supply Company Limited (IESCO).
Senator Anwar ul Haq Kakar inquired why the Ministry of Power wants to privatize PESCO and IESCO. In response, the Ministry of Privatization Secretary told the committee that the major objective of the Ministry of Power behind the privatization of distribution companies (DISCOs) was to reduce transmission losses and improve the quality-of-service delivery.
In view of past lessons and latest global practices, for the privatization of DISCOs, the Pakistan Model was also proposed by a working group comprising officials from the Ministry of Privatization, National Electric Power Regulatory Authority (NEPRA), Power Division, Central Power Purchasing Agency (CPPA-G) and the World Bank.
Furthermore, the Cabinet Committee on Privatisation (CCoP) in May 2021 approved the concession contracts for eight of the ten DISCOs, whereas the management contract was approved for Quetta Electric Supply Company Limited (QESCO) and Tribal Electric Supply Company Limited (TESCO).
However, there have been subsequent changes in policy and regulatory framework which have a direct impact on DISCOs and the scope of concessions and management contracts to be developed as part of this arrangement.
The members of the committee discussed the extent of technical and commercial losses in various DISCOs and efforts being put in by the Power Division to improve the situation.
The committee was also informed that CCoP in its meeting held in June this year directed Power Division to write to all the provinces through the Ministry of Inter Provincial Coordination for negotiation in buying the relevant DISCOs, and letters to that effect have been dispatched to the provinces.
Federal Minister for Privatisation Abid Hussain Bhayo said that Sindh is already in the process of negotiation with the Power Division for the acquisition of Sukkur Electric Power Company (SEPCO) and Hyderabad Electric Power Company (HESCO). He expressed his confidence in the ability of the provinces to be successful in the power distribution business.
The standing committee agreed that as per the new electrical policy, the role of provincial, district, and law-enforcing agencies should be institutionalized in curbing the line losses and poor collections.
The matter relating to the privatization of the Jinnah Convention Centre (JCC) was moved to the next meeting.
As per the directions of the committee in the last meeting, Secretary Privatization briefed the forum about the hiring and remuneration package of the consultants currently working in the Commission. He said that the appointments, extensions, and remunerations are governed by Section-11, sub-section (2) of the Privatization Commission (PC) Ordinance 2000.
The committee after consultation decided to formulate a sub-committee of three members which would be briefed on the appointment procedure and other matters relating to these contractual appointments of consultants and advisors.
