THE government has shelved its plan to privatize the loss-making power distribution companies (Discos) or hand them over to the provinces and has come up with the idea of striking concession contracts for leasing them out for 30 years. According to reports, Ministers for Energy and Privatization would meet next week to firm up modalities for leasing out Discos to local and foreign interested parties.
It is a big question mark whether or not the proposed concessionary agreements with the private sector will, in any way, help tackle the challenges facing the energy sector of the country. There can be no two opinions that the crisis in the energy sector is one of the main factors behind the economic and financial sufferings of the people and the State. In the absence of necessary details of the proposed plan, it is not clear how and why the private sector would take charge of the loss incurring discos where electricity theft and default have become norms. If the State, with all the might at its disposal, is unable to plug loopholes, how would it be possible for the private sector to earn profit without exploiting the honest consumers and the general public? It is also a fact that almost all discos are very large in size and, therefore, might become unmanageable for contractors without their further bifurcation. It is also not clear who will be responsible for fixation of the tariff and investment on expansion and upgradation of the existing distribution system, which is vital to ensure sustainability of the system. On the face of it, the proposal to hand over discos to the provincial governments concerned was the most viable solution but no one knows for sure what caused the government to change its mind.
