THE Privatization Commission Board has approved key recommendations for submission to the Cabinet Committee on Privatization (CCoP) regarding the privatization of the first batch of power distribution companies (Discos). The companies included in this phase are Faisalabad Electric Supply Company (Fesco), Gujranwala Electric Power Company (Gepco) and Islamabad Electric Supply Company (Iesco). The Board approved a framework for privatization aimed at attracting credible private-sector participation and unlocking value in the power distribution sector.
The decision to begin the process of privatization of discos from the most efficient ones is in direct conflict with the original objective of divestment of state-owned enterprises, which was to get rid of loss-incurring entities. The most important issue for the general public is the poor quality of service that they get even after paying the highest prices for electricity in the region. The government argues the involvement of the private sector will help improve efficiency but, with a few exceptions, hardly any privatized institution has excelled and instead, in some cases, it led to cartelization to the harm of the people. The woes of consumers can hardly be addressed by mere privatization of discos if issues concerning pricing, losses, theft and infrastructure improvement are not resolved. These issues are highlighted by the total failure of the government to ensure uninterrupted supply of electricity to consumers even during this period of lean demand. What a strategy: despite closure of markets at 8.00 pm consumers are forced to experience the worst kind of load-shedding during peak hours in April on the plea to save money on running of plants but the savings will go to the IPPs for idle capacity! This amounts to benefiting IPPs at the cost of consumers.
