The ministry of energy has proposed federal cabinet to delist all DISCOs from provincialization and privatization lists.
Sources said that ministry has forwarded the summary with regard to strengthening management in distribution companies (DISCOs) to federal cabinet for delisting all DISCOs from provincilazation and privatization lists.
In addition, it also proposed offering DISCOs through concession model as the high ups of Energy Ministry believe that concession model will bring desired results for Pakistan.
It was agreed that two smaller DISCOs including GEPCO and HESCO may be earmarked, sequencing of other DISCOs may be done on the advice of transaction advisor.
The ministry has also asked cabinet to approve appointment of transaction advisor as IFC has also expressed interest to provide transaction advisory services using its global experience with concessions.
Sources also said that government has also committed that it will engage a transaction advisor for long term concession of DISCOs by end of April 2024. Meanwhile, the World Bank has also offered grant based technical assistance and risk guarantee instruments.
It is pertinent to note that DISCOs were placed on the active privatization list but the process of privatization could not be started. During the tenure of the last government, a committee on transfer of DISCOs to provinces was constituted. The committee submitted its report to the then PM who directed that the summary may be placed before the new cabinet.
Sources said that the minister for privatization in September last year raised issue for adoption of an appropriate course for transferring management of DISCOs to private sector in a SIFC meeting. The meeting approved the recommendation of privatization minister regarding private sector participation in management of DISCOs including management contract as well as outsourcing.
Meanwhile, the power division is of the point of view that transferring of DISCOs to the provincial governments is unlikely to lead the required strategic shift furthermore provincial governments have also attached a number of conditions for taking over the ownership of the respective DISCOs which may not their improve operational performance.
